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Loans
 12 Months Ended
Oct. 31, 2023
Text Block [Abstract]  
Loans
Note  5
  
Loans
(1)(2)
 
 
$ millions, as at October 31
                              
2023
                                               2022         
    
Gross
amount
    
Stage 3
allowance
    
Stages 1
and 2
allowance
    
Total
allowance
 
(3)
    
Net
total
    
Allowances
as a % of
gross loans
            Gross
amount		     Stage 3
allowance		     Stages 1
and 2
allowance		     Total
allowance
 (3)
    
Net
total
     Allowances
as a % of
gross loans		  
Residential mortgages
(4)
  
$
274,244
 
  
$
224
 
  
$
232
 
  
$
456
 
  
$
273,788
 
  
 
0.2
 % 
     $ 269,706     $ 167     $ 126     $ 293     $ 269,413       0.1  % 
Personal
  
 
45,587
 
  
 
181
 
  
 
836
 
  
 
1,017
 
  
 
44,570
 
  
 
2.2
 
       45,429       146       756       902       44,527       2.0  
Credit card
  
 
18,538
 
  
 
–
 
  
 
685
 
  
 
685
 
  
 
17,853
 
  
 
3.7
 
       16,479       –       784       784       15,695       4.8  
Business and government
 (4)
 
 
194,870
 
 
 
667
 
 
 
1,077
 
 
 
1,744
 
 
 
193,126
 
 
 
0.9
 
 
 
 
 
 
 
188,542
 
 
 
351
 
 
 
743
 
 
 
1,094
 
 
 
187,448
 
 
 
0.6
 
 
  
$
    533,239
 
  
$
    1,072
 
  
$
    2,830
 
  
$
    3,902
 
  
$
    529,337
 
  
 
0.7
 % 
  
 
 
 
   $     520,156     $     664     $     2,409     $     3,073     $     517,083       0.6  % 
 
(1)
Loans are net of unearned income of $706 million (2022: $689 million).
(2)
Includes gross loans of $112.6 billion (2022: $111.8 billion) denominated in U.S. dollars and $10.5 billion (2022: $9.8 billion) denominated in other foreign currencies.
(3)
Includes ECL allowances for customers’ liability under acceptances.
(4)
Includes $3 million of residential mortgages (2022: $4 million) and $270 million of business and government loans (2022: $963 million) that are measured and designated at FVTPL.
 
Allowance for credit losses
The following table provides a reconciliation of the opening balance to the closing balance of the ECL allowance:
 
$ millions, as at or for the year ended October 31
         
2023
  
   
Stage 1
    
Stage 2
    
Stage 3
        
    
Collective provision
12-month
ECL
performing
    
Collective provision
lifetime ECL
performing
    
Collective and
individual provision
lifetime ECL
credit-impaired
    
Total
  
Residential mortgages
        
Balance at beginning of year
  
$
57
 
  
$
69
 
  
$
167
 
  
$
293
 
Originations net of repayments and other derecognitions
  
 
13
 
  
 
(9
) 
  
 
(32
) 
  
 
(28
) 
Changes in model
  
 
4
 
  
 
5
 
  
 
12
 
  
 
21
 
Net remeasurement
(1)
  
 
(62
) 
  
 
159
 
  
 
122
 
  
 
219
 
Transfers
(1)
        
– to
12-month
ECL
  
 
97
 
  
 
(96
) 
  
 
(1
) 
  
 
–
 
– to lifetime ECL performing
  
 
(18
) 
  
 
22
 
  
 
(4
) 
  
 
–
 
– to lifetime ECL credit-impaired
  
 
–
 
  
 
(7
) 
  
 
7
 
  
 
–
 
Provision for (reversal of) credit losses
(2)
  
 
34
 
  
 
74
 
  
 
104
 
  
 
212
 
Write-offs
(3)
  
 
–
 
  
 
–
 
  
 
(33
) 
  
 
(33
) 
Recoveries
  
 
–
 
  
 
–
 
  
 
5
 
  
 
5
 
Interest income on impaired loans
  
 
–
 
  
 
–
 
  
 
(17
) 
  
 
(17
) 
Foreign exchange and other
  
 
(1
) 
  
 
(1
) 
  
 
(2
) 
  
 
(4
) 
Balance at end of year
  
$
90
 
  
$
142
 
  
$
224
 
  
$
456
 
Personal
        
Balance at beginning of year
  
$
137
 
  
$
656
 
  
$
146
 
  
$
939
 
Originations net of repayments and other derecognitions
  
 
43
 
  
 
(62
) 
  
 
(31
) 
  
 
(50
) 
Changes in model
  
 
(1
) 
  
 
–
 
  
 
–
 
  
 
(1
) 
Net remeasurement
(1)
  
 
(421
) 
  
 
591
 
  
 
373
 
  
 
543
 
Transfers
(1)
        
– to
12-month
ECL
  
 
468
 
  
 
(465
) 
  
 
(3
) 
  
 
–
 
– to lifetime ECL performing
  
 
(53
) 
  
 
63
 
  
 
(10
) 
  
 
–
 
– to lifetime ECL credit-impaired
  
 
–
 
  
 
(73
) 
  
 
73
 
  
 
–
 
Provision for (reversal of) credit losses
(2)
  
 
36
 
  
 
54
 
  
 
402
 
  
 
492
 
Write-offs
(3)
  
 
–
 
  
 
–
 
  
 
(428
) 
  
 
(428
) 
Recoveries
  
 
–
 
  
 
–
 
  
 
65
 
  
 
65
 
Interest income on impaired loans
  
 
–
 
  
 
–
 
  
 
(5
) 
  
 
(5
) 
Foreign exchange and other
  
 
1
 
  
 
(1
) 
  
 
1
 
  
 
1
 
Balance at end of year
  
$
174
 
  
$
709
 
  
$
181
 
  
$
1,064
 
Credit card
        
Balance at beginning of year
  
$
159
 
  
$
709
 
  
$
–
 
  
$
868
 
Originations net of repayments and other derecognitions
  
 
18
 
  
 
(76
) 
  
 
–
 
  
 
(58
) 
Changes in model
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
Net remeasurement
(1)
  
 
(493
) 
  
 
684
 
  
 
223
 
  
 
414
 
Transfers
(1)
        
– to
12-month
ECL
  
 
553
 
  
 
(553
) 
  
 
–
 
  
 
–
 
– to lifetime ECL performing
  
 
(56
) 
  
 
56
 
  
 
–
 
  
 
–
 
– to lifetime ECL credit-impaired
  
 
–
 
  
 
(229
) 
  
 
229
 
  
 
–
 
Provision for (reversal of) credit losses
(2)
  
 
22
 
  
 
(118
) 
  
 
452
 
  
 
356
 
Write-offs
(3)
  
 
–
 
  
 
–
 
  
 
(572
) 
  
 
(572
) 
Recoveries
  
 
–
 
  
 
–
 
  
 
120
 
  
 
120
 
Interest income on impaired loans
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
Foreign exchange and other
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
Balance at end of year
  
$
181
 
  
$
591
 
  
$
–
 
  
$
772
 
Business and government
        
Balance at beginning of year
  
$
335
 
  
$
490
 
  
$
351
 
  
$
1,176
 
Originations net of repayments and other derecognitions
  
 
21
 
  
 
(19
) 
  
 
(33
) 
  
 
(31
) 
Changes in model
  
 
(2
) 
  
 
11
 
  
 
–
 
  
 
9
 
Net remeasurement
(1)(4)
  
 
(230
) 
  
 
583
 
  
 
619
 
  
 
972
 
Transfers
(1)
        
– to
12-month
ECL
  
 
205
 
  
 
(199
) 
  
 
(6
) 
  
 
–
 
– to lifetime ECL performing
  
 
(36
) 
  
 
52
 
  
 
(16
) 
  
 
–
 
– to lifetime ECL credit-impaired
  
 
–
 
  
 
(72
) 
  
 
72
 
  
 
–
 
Provision for (reversal of) credit losses
(2)
  
 
(42
) 
  
 
356
 
  
 
636
 
  
 
950
 
Write-offs
(3)
  
 
–
 
  
 
–
 
  
 
(316
) 
  
 
(316
) 
Recoveries
  
 
–
 
  
 
–
 
  
 
23
 
  
 
23
 
Interest income on impaired loans
  
 
–
 
  
 
–
 
  
 
(47
) 
  
 
(47
) 
Foreign exchange and other
  
 
1
 
  
 
18
 
  
 
20
 
  
 
39
 
Balance at end of year
  
$
294
 
  
$
864
 
  
$
667
 
  
$
1,825
 
Total ECL allowance
(5)
  
$
739
 
  
$
2,306
 
  
$
1,072
 
  
$
4,117
 
Comprises:
        
Loans
  
$
     650
 
  
$
    2,180
 
  
$
    1,072
 
  
$
    3,902
 
Undrawn credit facilities and other
off-balance
sheet exposures
(6)
  
 
89
 
  
 
126
 
  
 
–
 
  
 
215
 
 
(1)
Transfers represent stage movements of prior year ECL allowances to the current year stage classification. Net remeasurement represents the current year change in ECL allowances for transfers, net write-offs, changes in forecasts of forward-looking information, parameter updates, and partial repayments in the year.
(2)
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.
(3)
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.
(4)
Includes the impact of a change in the internal risk rating methodology applied in the first quarter of 2023 at CIBC Bank USA.
(5)
See Note 4 for the ECL allowance on debt securities measured at FVOC
I a
nd amortized cost. The ECL allowances for other financial assets classified at amortized cost were immaterial as at October 31, 2023 and October 31, 2022 and were excluded from the table above. Financial assets other than loans that are classified at amortized cost are presented on our consolidated balance sheet net of ECL allowances.
(6)
Included in Other liabilities on our consolidated balance sheet.
(7)
Includes ECL allowances of $63 million recognized immediately after the acquisition of the Canadian Costco credit card portfolio on March 4, 2022.
 
$ millions, as at or for the year ended October 31
            2022  
     Stage 1     Stage 2     Stage 3               
      Collective provision
12-month
ECL
performing		     Collective provision
lifetime ECL
performing		     Collective and
individual provision
lifetime ECL
credit-impaired
             Total  
Residential mortgages
            
Balance at beginning of year
    $ 59     $ 63     $ 158        $ 280  
Originations net of repayments and other derecognitions
      17       (7 )      (25 )         (15 ) 
Changes in model
      (4 )      (1 )      –          (5 ) 
Net remeasurement
(1)
      (89 )      85       85          81  
Transfers
(1)
            
– to
12-month
ECL
      82       (77 )      (5 )         –  
– to lifetime ECL performing
      (9 )      16       (7 )         –  
– to lifetime ECL credit-impaired
      (1 )      (12 )      13                –  
Provision for (reversal of) credit losses
(2)
      (4 )      4       61          61  
Write-offs
(3)
      –       –       (47 )         (47 ) 
Recoveries
      –       –       2          2  
Interest income on impaired loans
      –       –       (16 )         (16 ) 
Foreign exchange and other
      2       2       9                13  
Balance at end of year
    $ 57     $ 69     $ 167              $ 293  
Personal
            
Balance at beginning of year
    $ 150     $ 547     $ 106        $ 803  
Originations net of repayments and other derecognitions
      37       (55 )      (14 )         (32 ) 
Changes in model
      1       19       –          20  
Net remeasurement
(1)
      (349 )      500       195          346  
Transfers
(1)
            
– to
12-month
ECL
      336       (333 )      (3 )         –  
– to lifetime ECL performing
      (40 )      52       (12 )         –  
– to lifetime ECL credit-impaired
      –       (75 )      75                –  
Provision for (reversal of) credit losses
(2)
      (15 )      108       241          334  
Write-offs
(3)
      –       –       (274 )         (274 ) 
Recoveries
      –       –       69          69  
Interest income on impaired loans
      –       –       (4 )         (4 ) 
Foreign exchange and other
      2       1       8                11  
Balance at end of year
    $ 137     $ 656     $ 146              $ 939  
Credit card
            
Balance at beginning of year
    $ 136     $ 517     $ –        $ 653  
Originations net of repayments and other derecognitions
(7)
      76       (38 )      –          38  
Changes in model
      –       –       –          –  
Net remeasurement
(1)
      (437 )      747       150          460  
Transfers
(1)
            
– to
12-month
ECL
      436       (436 )      –          –  
– to lifetime ECL performing
      (52 )      52       –          –  
– to lifetime ECL credit-impaired
      –       (133 )      133                –  
Provision for (reversal of) credit losses
(2)
      23       192       283          498  
Write-offs
(3)
      –       –       (397 )         (397 ) 
Recoveries
      –       –       114          114  
Interest income on impaired loans
      –       –       –          –  
Foreign exchange and other
      –       –       –                –  
Balance at end of year
    $ 159     $ 709     $ –              $ 868  
Business and government
            
Balance at beginning of year
    $ 277     $ 449     $ 508        $ 1,234  
Originations net of repayments and other derecognitions
      41       (12 )      (34 )         (5 ) 
Changes in model
      30       (4 )      –          26  
Net remeasurement
(1)
      (95 )      89       149          143  
Transfers
(1)
            
– to
12-month
ECL
      98       (91 )      (7 )         –  
– to lifetime ECL performing
      (34 )      38       (4 )         –  
– to lifetime ECL credit-impaired
      (1 )      (7 )      8                –  
Provision for (reversal of) credit losses
(2)
      39       13       112          164  
Write-offs
(3)
      –       –       (312 )         (312 ) 
Recoveries
      –       –       33          33  
Interest income on impaired loans
      –       –       (15 )         (15 ) 
Foreign exchange and other
      19       28       25                72  
Balance at end of year
    $ 335     $ 490     $ 351              $ 1,176  
Total ECL allowance
(5)
    $ 688     $ 1,924     $ 664              $ 3,276  
Comprises:
            
Loans
    $      600     $     1,809     $      664        $     3,073  
Undrawn credit facilities and other
off-balance
sheet exposures
(6)
      88       115       –                203  
See previous page for footnote references.
 
Impact of acquisition of Canadian Costco credit card portfolio
No ECL allowance was recognized in the purchase equation on the acquisition date for the acquired Canadian Costco credit card portfolio as the purchased loans were initially measured at their acquisition date fair values. Instead, immediately after the acquisition date, ECL allowances were established in the Provision for credit losses in the consolidated statement of income based on classifying each acquired credit card receivable in stage 1, since the acquisition date is established as the initial recognition date of purchased performing loans for the purpose of assessing whether a SICR has occurred. On the date of acquisition, none of the acquired credit card receivables were considered to be impaired. Subsequent to the acquisition date, ECL allowances are estimated in a manner consistent with our SICR and impairment policies that we apply to loans that we originate. See Note 3 for further details on the acquisition of the Canadian Costco credit card portfolio.
Inputs, assumptions and model techniques
Our ECL allowances are estimated using complex models that incorporate inputs, assumptions and model techniques that involve a high degree of management judgment. In particular, the following ECL elements are subject to a high level of judgment that can have a significant impact on the level of ECL allowances provided:
•  
Determining when a SICR of a loan has occurred;
•  
Measuring both
12-month
and lifetime credit losses; and
•  
Forecasting forward-looking information for multiple scenarios and determining the probability weighting of the scenarios driven by the changes in the macroeconomic environment.
In addition, the interrelationship between these elements is also subject to a high degree of judgment which can also have a significant impact on the level of ECL recognized.
We continue to operate in an uncertain macroeconomic environment. There is inherent uncertainty in estimating the impact that higher levels of interest rates, the easing of inflationary pressures, events in the U.S. banking sector and geopolitical events will have on the macroeconomic environment. As a result, a heightened level of judgment in estimating ECLs in respect of all these elements
,
as discussed below, continued to be required.
Determining when a significant increase in credit risk has occurred
The determination of whether a loan has experienced a SICR has a significant impact on the level of ECL allowance as loans that are in stage 1 are measured at
12-month
ECL, while loans in stage 2 are measured at lifetime ECL. Migration of loans between stage 1 and stage 2 can cause significant volatility in the amount of the recognized ECL allowances and the provision for credit losses in a particular period.
For the majority of our retail loan portfolios, we determine a SICR based on relative changes in the loan’s lifetime PD since its initial recognition. The PDs used for this purpose are the expected value of our upside, downside and base case lifetime PDs. Significant judgment is involved in determining the upside, downside and base case lifetime PDs through the incorporation of forward-looking information into
long-run
PDs, in determining the probability weightings of the scenarios, and in determining the relative changes in PDs that are indicative of a SICR for our various retail products. Increases in the expected PDs or decreases in the thresholds for changes in PDs that are indicative of a SICR can cause significant migration of loans from stage 1 to stage 2, which in turn can cause a significant increase in the amount of ECL allowances recognized. In contrast, decreases in the expected PDs or increases in the thresholds for changes in PDs that are indicative of a SICR can cause significant migration of loans from stage 2 to stage 1.
For the majority of our business and government loan portfolios, we determine a SICR based on relative changes in internal risk ratings since initial recognition. Significant judgment is involved in the determination of the internal risk ratings. Deterioration or improvement in the risk ratings or adjustments to the risk rating downgrade thresholds used to determine a SICR can cause significant migration of loans and securities between stage 1 and stage 2, which in turn can have a significant impact on the amount of ECL allowances recognized.
While potentially significant to the level of ECL allowances recognized, the thresholds for changes in PDs that are indicative of a SICR for our retail portfolios and the risk rating downgrade thresholds used to determine a SICR for our business and government loan portfolios are not expected to change frequently.
All loans on which repayment of principal or payment of interest is contractually 30 days in arrears and all business and government loans that have migrated to the watch list risk rating are normally automatically migrated to stage 2 from stage 1.
As at October 31, 2023, if the ECL for the stage 2 performing loans were measured using stage 1 ECL as opposed to lifetime ECL, the ECLs would be $724 million lower than the total recognized IFRS 9 ECL on performing loans (2022: $1,110 million).
Measuring both
12-month
and lifetime expected credit losses
Our ECL models leverage the data, systems and processes that are used to calculate Basel expected loss regulatory adjustments for the portion of our retail and business and government portfolios under the internal ratings-based (IRB) approach. Significant judgment is applied in leveraging the data and modelling techniques used to calculate Basel risk parameters to meet IFRS 9 requirements, including the conversion of
through-the-cycle
estimates to the
point-in-time
parameters used under IFRS 9 that consider forward-looking information. For standardized business and government portfolios, available
long-run
PDs, LGDs and EADs are also converted to
point-in-time
parameters through the incorporation of forward-looking information for the purpose of measuring ECL under IFRS 9.
Significant judgment is involved in determining which forward-looking information variables are relevant for particular portfolios and in determining the extent by which
through-the-cycle
parameters should be adjusted for forward-looking information to determine
point-in-time
parameters. While changes in the set of forward-looking information variables used to convert
through-the-cycle
PDs, LGDs and EADs into
point-in-time
parameters can either increase or decrease ECL allowances in a particular period, changes to the mapping of forward-looking information variables to particular portfolios are expected to be infrequent. However, changes in the particular forward-looking information parameters used to quantify
point-in-time
parameters will be frequent as our forecasts are updated on a quarterly basis. Increases in the level of pessimism in the forward-looking information variables will cause increases in ECL, while increases in the level of optimism in the forward-looking information variables will cause decreases in ECL. These increases and decreases could be significant in any particular period and will start to occur in the period where our outlook of the future changes.
With respect to the lifetime of a financial instrument, the maximum period considered when measuring ECL is the maximum contractual period over which we are exposed to credit risk. For revolving facilities, such as credit cards, the lifetime of a credit card account is the expected behavioural life. Significant judgment is involved in the estimate of the expected behavioural life. Increases in the expected behavioural life will increase the amount of ECL allowances, in particular for revolving loans in stage 2.
 
Forecasting forward-looking information for multiple scenarios and determining the probability weighting of the scenarios
As indicated above, forward-looking information is incorporated into both our assessment of whether a financial asset has experienced a SICR since its initial recognition and in our estimate of ECL. From analysis of historical data, our risk management function has identified and reflected in our ECL allowance those relevant forward-looking information variables that contribute to credit risk and losses within our retail and business and government loan portfolios. Within our retail loan portfolio, key forward-looking information variables include Canadian unemployment rates, housing prices, gross domestic product (GDP) growth and household debt service ratios. In many cases these variables are forecasted at the provincial level. Housing prices are also forecasted at the municipal level in some cases. Within our business and government loan portfolio, key drivers that impact the credit performance of the entire portfolio include Standard & Poor’s (S&P) 500 growth rates, business credit growth rates, unemployment rates and credit spreads, while forward-looking information variables such as commodity prices and mining activity are significant for certain portfolios, and U.S. unemployment rates and U.S. GDP growth are significant for our U.S. portfolios.
For the majority of our loan portfolios, our forecast of forward-looking information variables is established from a “base case” or most likely scenario that is used internally by management for planning and forecasting purposes. For most of the forward-looking information variables related to our Canadian businesses, we have forecast scenarios by province. In forming the base case scenario, we consider the forecasts of international organizations and monetary authorities such as the Organisation for Economic
Co-operation
and Development, the International Monetary Fund, and the Bank of Canada, as well as private sector economists. We then derive reasonably possible “upside case” and “downside case” scenarios using external forecasts that are above and below our base case and the application of management judgment. A probability weighting is assigned to our base case, upside case and downside case scenarios based on management judgment.
The forecasting process is overseen by a governance committee consisting of internal stakeholders from across our bank including Risk Management, Economics, Finance and the impacted SBUs and involves a significant amount of judgment both in determining the forward-looking information forecasts for our various scenarios and in determining the probability weighting assigned to the scenarios. In general, a worsening of our outlook on forecasted forward-looking information for each scenario, an increase in the probability of the downside case scenario occurring, or a decrease in the probability of the upside case scenario occurring will increase the number of loans migrating from stage 1 to stage 2 and increase the estimated ECL allowance. In contrast, an improvement in our outlook on forecasted forward-looking information, an increase in the probability of the upside case scenario occurring, or a decrease in the probability of the downside case scenario occurring will have the opposite impact. It is not possible to meaningfully isolate the impact of changes in the various forward-looking information variables for a particular scenario because of both the interrelationship between the variables and the interrelationship between the level of pessimism inherent in a particular scenario and its probability of occurring.
The forecasting of forward-looking information and the determination of scenario weightings continued to require a heightened application of judgment in a number of areas as our forecast reflects numerous assumptions and uncertainties inherent in the current macroeconomic environment.
The following table provides the base case, upside case and downside case scenario forecasts for select forward-looking information variables used to estimate our ECL.
 
    Base case     Upside case     Downside case  
As at October 31, 2023
   Average
value over
the next
12 months		     Average
value over
the remaining
forecast period
 (1)
     Average
value over
the next
12 months		     Average
value over
the remaining
forecast period
 (1)
     Average
value over
the next
12 months		     Average
value over
the remaining
forecast period
 
(1)
  
Real GDP year-over-year growth
            
Canada
(2)
  
 
0.6
 % 
  
 
1.9
 % 
  
 
2.0
 % 
  
 
2.7
 % 
  
 
(0.7
)% 
  
 
1.3
 % 
United States
  
 
0.9
 % 
  
 
1.7
 % 
  
 
3.0
 % 
  
 
3.1
 % 
  
 
(0.8
)% 
  
 
0.9
 % 
Unemployment rate
            
Canada
(2)
  
 
6.1
 % 
  
 
5.8
 % 
  
 
5.3
 % 
  
 
5.4
 % 
  
 
7.1
 % 
  
 
6.9
 % 
United States
  
 
4.1
 % 
  
 
4.0
 % 
  
 
3.2
 % 
  
 
3.2
 % 
  
 
5.4
 % 
  
 
4.9
 % 
Canadian Housing Price Index growth
(2)
  
 
0.8
 % 
  
 
3.0
 % 
  
 
4.4
 % 
  
 
5.4
 % 
  
 
(7.8
)% 
  
 
0.4
 % 
S&P 500 Index growth rate
  
 
5.5
 % 
  
 
5.9
 % 
  
 
12.5
 % 
  
 
11.1
 % 
  
 
(2.5
)% 
  
 
(0.5
)% 
Canadian household debt service ratio
  
 
    15.5
 % 
  
 
    14.8
 % 
  
 
    14.9
 % 
  
 
    14.5
 % 
  
 
    16.1
 % 
  
 
    15.0
 % 
West Texas Intermediate Oil Price (US$)
  
$
84
 
  
$
76
 
  
$
97
 
  
$
110
 
  
$
70
 
  
$
58
 
 
(1)
The remaining forecast period is generally four years.
(2)
National-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 ECL will differ from the national forecasts presented above.
 
    Base case     Upside case     Downside case  
As at October 31, 2022
   Average
value over
the next
12 months		     Average
value over
the remaining
forecast period
 (1)
     Average
value over
the next
12 months		     Average
value over
the remaining
forecast period
 (1)
     Average
value over
the next
12 months		     Average
value over
the remaining
forecast period
 (1)
  
Real GDP year-over-year growth
            
Canada
(2)
     0.8  %      1.5  %      3.9  %      2.8  %      (0.6 )%      1.0  % 
United States
     0.7  %      1.3  %      2.9  %      3.0  %      (2.1 )%      0.4  % 
Unemployment rate
            
Canada
(2)
     5.5  %      5.9  %      4.9  %      5.6  %      6.0  %      6.8  % 
United States
     4.0  %      4.2  %      3.3  %      3.3  %      5.6  %      5.1  % 
Canadian Housing Price Index growth
(2)
     (2.5 )%      1.9  %      10.1  %      6.6  %      (13.1 )%      (5.2 )% 
S&P 500 Index growth rate
     (1.4 )%      6.0  %      6.3  %      12.1  %      (13.4 )%      (1.3 )% 
Canadian household debt service ratio
         15.5  %          15.1  %          14.4  %          14.5  %           15.9  %          15.2  % 
West Texas Intermediate Oil Price (US$)
   $ 92     $ 81     $ 119     $ 107     $ 76     $ 56  
See above for footnote references.
 
As required, the forward-looking information used to estimate ECLs reflects our expectations as at October 31, 2023 and October 31, 2022, respectively, and does not reflect changes in expectation as a result of economic forecasts that may have subsequently emerged. The base case, upside case and downside case amounts shown represent the average value of the forecasts over the respective projection horizons. Our underlying base case projection as at October 31, 2023 is characterized by relatively weak real GDP growth in both Canada and the U.S. due to the higher interest rates imposed by central banks in an attempt to ease demand and bring inflation back to target levels, and a modest increase in unemployment rates in calendar 2024. Our base case continues to assume that interest rates will stay at elevated levels through the remainder of calendar 2023 and into the start of 2024, and then modestly reduce through to the end of 2024, although remaining at higher than
pre-pandemic
levels. Significant judgment continued to be inherent in the forecasting of forward-looking information, including our base case assumptions regarding the economic impact of higher levels of interest rates, the easing of inflationary pressures, the impact from events in the U.S. banking sector during the year and geopolitical events.
The downside case forecast continues to assume a recession and higher unemployment rates in Canada driven by a correction in the housing market, higher interest rates and lower consumer spending. The downside case forecast for the U.S. also assumes a recession from the interest rate hikes that were introduced to combat prolonged high levels of inflation. The downside forecasts also reflect slower recoveries thereafter to lower levels of sustained economic activity and unemployment rates persistently above where they stood
pre-pandemic.
The upside scenario continues to reflect a better economic environment than the base case forecast, particularly for the U.S.
As indicated above, forecasting forward-looking information for multiple scenarios and determining the probability weighting of the scenarios involves a high degree of management judgment. Assumptions concerning measures used by governments to combat inflation, the economic impact from higher levels of interest rates, the events in the U.S. banking sector during the year and geopolitical events are material to these forecasts.
If we were to only use our base case scenario for the measurement of ECL for our performing loans, our ECL allowance would be $284 million lower than the recognized ECL as at October 31, 2023 (2022: $248 million). If we were to only use our downside case scenario for the measurement of ECL for our performing loans, our ECL allowance would be $926 million higher than the recognized ECL as at October 31, 2023 (2022: $847 million). This sensitivity is isolated to the measurement of ECL and therefore did not consider changes in the migration of exposures between stage 1 and stage 2 from the determination of the SICR that would have resulted in a 100% base case scenario or a 100% downside case scenario. As a result, our ECL allowance on performing loans could exceed the amount implied by the 100% downside case scenario from the migration of additional exposures from stage 1 to stage 2. Actual credit losses could differ materially from those reflected in our estimates.
Use of management overlays
Management overlays to ECL allowance estimates are adjustments which we use in circumstances where we judge that our existing inputs, assumptions and model techniques do not capture all relevant risk factors. The emergence of new macroeconomic, microeconomic or political events, along with expected changes to parameters, models or data that are not incorporated in our current parameters, internal risk rating migrations, or forward-looking information are examples of such circumstances. To address the uncertainties inherent in the current environment, we continue to utilize management overlays with respect to the impact of certain forward-looking information and credit metrics that are not expected to be as indicative of the credit condition of the portfolios as the
hist
orical experience in our models would have otherwise suggested. The use of management overlays requires the application of significant judgment that impacts the amount of ECL allowances recognized. Actual credit losses could differ materially from those reflected in our estimates.
 
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 our risk management PD bands for retail exposures, and based on our internal risk ratings for business and government exposures. Refer to the “Credit risk” section of the MD&A for details on the CIBC risk categories.
Loans
(1)
 
$ millions, as at October 31
                       
2023
                          2022  
    
Stage 1
    
Stage 2
    
Stage 3
 (2)(3)
    
Total
     Stage 1     Stage 2     Stage 3
 (2)(3)
     Total  
Residential mortgages
                
– Exceptionally low
  
$
150,022
 
  
$
14,999
 
  
$
–
 
  
$
165,021
 
   $ 174,749     $ 140     $ –     $ 174,889  
– Very low
  
 
74,149
 
  
 
9,107
 
  
 
–
 
  
 
83,256
 
     53,795       498       –       54,293  
– Low
  
 
10,817
 
  
 
5,112
 
  
 
–
 
  
 
15,929
 
     24,200       6,816       –       31,016  
– Medium
  
 
322
 
  
 
4,980
 
  
 
–
 
  
 
5,302
 
     261       4,927       –       5,188  
– High
  
 
–
 
  
 
1,100
 
  
 
–
 
  
 
1,100
 
     –       906       –       906  
– Default
  
 
–
 
  
 
–
 
  
 
585
 
  
 
585
 
     –       –       374       374  
– Not rated
  
 
2,630
 
  
 
219
 
  
 
202
 
  
 
3,051
 
     2,604       214       222       3,040  
Gross residential mortgages
(4)(5)(6)
  
 
237,940
 
  
 
35,517
 
  
 
787
 
  
 
274,244
 
     255,609       13,501       596       269,706  
ECL allowance
  
 
90
 
  
 
142
 
  
 
224
 
  
 
456
 
     57       69       167       293  
Net residential mortgages
  
 
237,850
 
  
 
35,375
 
  
 
563
 
  
 
273,788
 
     255,552       13,432       429       269,413  
Personal
                
– Exceptionally low
  
 
18,785
 
  
 
3
 
  
 
–
 
  
 
18,788
 
     18,943       1       –       18,944  
– Very low
  
 
4,389
 
  
 
12
 
  
 
–
 
  
 
4,401
 
     6,119       5       –       6,124  
– Low
  
 
11,031
 
  
 
4,311
 
  
 
–
 
  
 
15,342
 
     9,117       4,953       –       14,070  
– Medium
  
 
1,165
 
  
 
3,062
 
  
 
–
 
  
 
4,227
 
     934       3,084       –       4,018  
– High
  
 
211
 
  
 
1,624
 
  
 
–
 
  
 
1,835
 
     266       1,089       –       1,355  
– Default
  
 
–
 
  
 
–
 
  
 
214
 
  
 
214
 
     –       –       175       175  
– Not rated
  
 
723
 
  
 
24
 
  
 
33
 
  
 
780
 
     657       34       52       743  
Gross personal
(5)(6)
  
 
36,304
 
  
 
9,036
 
  
 
247
 
  
 
45,587
 
     36,036       9,166       227       45,429  
ECL allowance
  
 
141
 
  
 
695
 
  
 
181
 
  
 
1,017
 
     115       641       146       902  
Net personal
  
 
36,163
 
  
 
8,341
 
  
 
66
 
  
 
44,570
 
     35,921       8,525       81       44,527  
Credit card
                
– Exceptionally low
  
 
4,279
 
  
 
–
 
  
 
–
 
  
 
4,279
 
     3,151       –       –       3,151  
– Very low
  
 
1,061
 
  
 
–
 
  
 
–
 
  
 
1,061
 
     1,042       –       –       1,042  
– Low
  
 
6,642
 
  
 
35
 
  
 
–
 
  
 
6,677
 
     6,936       597       –       7,533  
– Medium
  
 
2,626
 
  
 
2,953
 
  
 
–
 
  
 
5,579
 
     992       2,927       –       3,919  
– High
  
 
6
 
  
 
777
 
  
 
–
 
  
 
783
 
     –       682       –       682  
– Default
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
     –       –       –       –  
– Not rated
  
 
153
 
  
 
6
 
  
 
–
 
  
 
159
 
     145       7       –       152  
Gross credit card
(6)
  
 
14,767
 
  
 
3,771
 
  
 
–
 
  
 
18,538
 
     12,266       4,213       –       16,479  
ECL allowance
  
 
166
 
  
 
519
 
  
 
–
 
  
 
685
 
     143       641       –       784  
Net credit card
  
 
14,601
 
  
 
3,252
 
  
 
–
 
  
 
17,853
 
     12,123       3,572       –       15,695  
Business and government
                
– Investment grade
  
 
99,322
 
  
 
512
 
  
 
–
 
  
 
99,834
 
     87,184       404       –       87,588  
– Non-investment grade
  
 
91,920
 
  
 
7,190
 
  
 
–
 
  
 
99,110
 
     101,889       6,457       –       108,346  
– Watch list
  
 
101
 
  
 
4,478
 
  
 
–
 
  
 
4,579
 
     66       2,971       –       3,037  
– Default
  
 
–
 
  
 
–
 
  
 
1,956
 
  
 
1,956
 
     –       –       920       920  
– Not rated
  
 
192
 
  
 
15
 
  
 
–
 
  
 
207
 
     208       17       –       225  
Gross business and government
(4)(7)(8)
  
 
191,535
 
  
 
12,195
 
  
 
1,956
 
  
 
205,686
 
     189,347       9,849       920       200,116  
ECL allowance
  
 
253
 
  
 
824
 
  
 
667
 
  
 
1,744
 
     285       458       351       1,094  
Net business and government
  
 
191,282
 
  
 
11,371
 
  
 
1,289
 
  
 
203,942
 
     189,062       9,391       569       199,022  
Total net amount of loans
  
$
    479,896
 
  
$
    58,339
 
  
$
    1,918
 
  
$
    540,153
 
   $     492,658     $     34,920     $     1,079     $     528,657  
 
(1)
The table excludes debt securities measured at FVOCI, for which ECL allowances of $22 million (2022: $24 million) were recognized in AOCI. In addition, the table excludes debt securities classified at amortized cost, for which ECL allowances of $20 million were recognized as at October 31, 2023 (2022: $15 million). Other financial assets classified at amortized cost were also excluded from the table above as their ECL allowances were immaterial as at October 31, 2023 and October 31, 2022. Financial assets other than loans that are classified as amortized cost are presented on our consolidated balance sheet net of ECL allowances.
(2)
Excludes foreclosed assets of $13 million (2022: $24 million), which were included in Other assets on our consolidated balance sheet.
(3)
As at October 31, 2023, 93% (2022: 84%) of stage 3 impaired loans were either fully or partially collateralized.
(4)
Includes $3 million (2022: $4 million) of residential mortgages and $270 million (2022: $963 million) of business and government loans that are measured and designated at FVTPL.
(5)
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 determination of whether a SICR has occurred for these loans is based on relative changes in the loans’ lifetime PD without considering collateral or other credit enhancements.
(6)
The October 31, 2023 amounts include the impact of a change in credit score provider applied in the second quarter of 2023 for our Canadian retail loans.
(7)
Includes customers’ liability under acceptances of $10,816 million (2022: $11,574 million).
(8)
The October 31, 2023 amounts include the impact of a change in the internal risk rating methodology applied in the first quarter of 2023 at CIBC Bank USA.
 
Undrawn credit facilities and other
off-balance
sheet exposures
 
$ millions, as at October 31
                           
2023
                              2022  
     
Stage 1
     
Stage 2
     
Stage 3
     
Total
      Stage 1      Stage 2      Stage 3      Total  
Retail
                        
– Exceptionally low
   
$
    159,254
 
   
$
7
 
   
$
–
 
   
$
159,261
 
    $ 149,286      $ 6      $ –      $ 149,292  
– Very low
   
 
15,367
 
   
 
26
 
   
 
–
 
   
 
15,393
 
      14,461        51        –        14,512  
– Low
   
 
10,723
 
   
 
1,405
 
   
 
–
 
   
 
12,128
 
      10,844        2,412        –        13,256  
– Medium
   
 
1,256
 
   
 
986
 
   
 
–
 
   
 
2,242
 
      522        1,402        –        1,924  
– High
   
 
118
 
   
 
763
 
   
 
–
 
   
 
881
 
      155        682        –        837  
– Default
   
 
–
 
   
 
–
 
   
 
37
 
   
 
37
 
      –        –        39        39  
– Not rated
   
 
506
 
   
 
6
 
   
 
–
 
   
 
512
 
      484        8        –        492  
Gross retail
(1)
   
 
187,224
 
   
 
3,193
 
   
 
37
 
   
 
190,454
 
      175,752        4,561        39        180,352  
ECL allowance
   
 
48
 
   
 
86
 
   
 
–
 
   
 
134
 
      38        83        –        121  
Net retail
   
 
187,176
 
   
 
3,107
 
   
 
37
 
   
 
190,320
 
      175,714        4,478        39        180,231  
Business and government
                        
– Investment grade
   
 
147,206
 
   
 
361
 
   
 
–
 
   
 
147,567
 
      119,069        121        –        119,190  
– Non-investment grade
   
 
56,707
 
   
 
2,097
 
   
 
–
 
   
 
58,804
 
      64,446        2,540        –        66,986  
– Watch list
   
 
7
 
   
 
1,000
 
   
 
–
 
   
 
1,007
 
      15        571        –        586  
– Default
   
 
–
 
   
 
–
 
   
 
161
 
   
 
161
 
      –        –        69        69  
– Not rated
   
 
614
 
   
 
30
 
   
 
–
 
   
 
644
 
      575        26        –        601  
Gross business and government
(2)
   
 
204,534
 
   
 
3,488
 
   
 
161
 
   
 
208,183
 
      184,105        3,258        69        187,432  
ECL allowance
   
 
41
 
   
 
40
 
   
 
–
 
   
 
81
 
      50        32        –        82  
Net business and government
   
 
204,493
 
   
 
3,448
 
   
 
161
 
   
 
208,102
 
      184,055        3,226        69        187,350  
Total net undrawn credit facilities and other
off-balance
sheet exposures
   
$
    391,669
 
   
$
    6,555
 
   
$
    198
 
   
$
    398,422
 
    $     359,769      $     7,704      $     108      $     367,581  
 
(1)
The 2023 amounts include the impact of a change in credit score provider applied in the second quarter of 2023 for our Canadian retail loans.
(2)
The 2023 amounts include the impact of a change in the internal risk rating methodology applied in the first quarter of 2023 at CIBC Bank USA.
Net interest income after provision for credit losses
 
$ millions, for the year ended October 31
   
2023
      2022  
Interest income
   
$
    45,019
 
    $ 22,179  
Interest expense
   
 
32,194
 
      9,538  
Net interest income
   
 
12,825
 
      12,641  
Provision for (reversal of) credit losses
   
 
2,010
 
      1,057  
Net interest income after provision for credit losses
   
$
    10,815
 
    $     11,584  
Modified financial assets
As part of CIBC’s usual lending business, from time to time we may modify the contractual terms of loans classified as stage 2 and stage 3 for which the borrower has experienced financial difficulties, through the granting of a concession in the form of below-market rates or terms that we would not otherwise have considered.
During the year ended October 31, 2023, loans classified as stage 2 or stage 3 with an amortized cost of $1,422 million (2022: $434 million) before modification were modified through the granting of a financial concession in response to the borrower having experienced financial difficulties. In addition, the gross carrying amount of previously modified stage 2 or stage 3 loans that have returned to stage 1 during the year ended October 31, 2023 was $500 million (2022: $461 million), including loans that were previously subject to the client deferral programs.