TORONTO, Jan. 27, 2012 /CNW/ - CIBC (TSX: CM) (NYSE: CM) today released its supplementary financial information containing its unaudited quarterly and annual consolidated financial results for the year ended October 31, 2011, prepared in accordance with International Financial Reporting Standards (IFRS).

CIBC adopted IFRS on November 1, 2011, which replaced previous Canadian generally accepted accounting principles (Canadian GAAP). Our first interim consolidated financial statements prepared in accordance with IFRS will be for the quarter ending January 31, 2012, and our first annual consolidated financial statements prepared in accordance with IFRS will be for the year ending October 31, 2012. Commencing with our reporting under IFRS in the first quarter of 2012, we will provide 2011 IFRS comparative financial information, including an opening IFRS consolidated balance sheet as at November 1, 2010 (the Transition Date).

The release of our 2011 IFRS supplementary financial information, along with the following information, is provided to help users of the consolidated financial statements better understand the impact of the transition to IFRS on our comparative 2011 consolidated financial statements. This release should be read in conjunction with note 32 to our 2011 annual consolidated financial statements, which discloses our opening IFRS consolidated balance sheet and includes a description of the transitional elections and exceptions that were applied in the preparation of our opening IFRS consolidated balance sheet, as well as a description of the differences between our previous Canadian GAAP and IFRS accounting policies that gave rise to IFRS adjustments as at the Transition Date.

Overview of impact of adoption of IFRS

The key financial results and metrics for the year ended October 31, 2011 are as follows:

  • Net income attributable to equity shareholders was $2,867 million under IFRS compared to $3,079 million under
    Canadian GAAP.
  • Basic and diluted earnings per share under IFRS were $6.79 and $6.71, respectively, compared to $7.32 and $7.31
    under Canadian GAAP. Adjusted diluted earnings per share under IFRS was $7.57(1).
  • Our reported and adjusted efficiency ratio under IFRS were 60.2% and 56.4%(1), respectively.


(1) Non-GAAP measure. See the Non-GAAP measures section for further discussion.

Impact of IFRS on 2011 consolidated financial results

The impact on consolidated net income attributable to equity shareholders is as follows:
For the
  For the three months ended year ended
2011 2011 2011 2011 2011
$ millions Oct. 31 Jul. 31 Apr. 30 Jan. 31 Oct. 31
Net income - Canadian GAAP (1) $ 794 $ 808 $ 678 $ 799 $ 3,079
IFRS adjustments:
Securitized residential mortgages 2 7 5 (47) (33)
Consolidation (4) (19)
(1) Represents net income after income taxes and non-controlling interests (NCI) but before preferred share dividends and premiums. This is referred to hereafter as net income attributable to equity shareholders.

The impact on the condensed consolidated statement of income for the year ended October 31, 2011 is as follows:

An explanation of the more significant adjustments to net income attributable to equity shareholders for the year ended October 31, 2011 is provided below.

Securitized residential mortgages
Under IFRS, the transfer of mortgage-backed securities (MBS) created from pools of our residential mortgages to a government-sponsored trust is accounted for as a secured borrowing transaction rather than as a sale under Canadian GAAP. Additionally, under IFRS the creation of MBS is not an accounting event and therefore MBS held in inventory that were previously designated at fair value (fair value option - FVO) under Canadian GAAP are recognized as residential mortgages and are measured at amortized cost under IFRS.

As a result of the on-balance sheet accounting for residential mortgage pools underlying transferred MBS, we recognize interest income from residential mortgages and interest expense relating to the funding liabilities (secured borrowings), with a resulting net increase in net interest income for 2011 of $140 million. In addition, interest on the residential mortgages underlying the MBS inventory is classified in mortgage interest revenue instead of security interest revenue. The recognition of net interest income on the residential mortgages and funding liabilities are net of the amortization of the related origination costs and other amortized cost adjustments in accordance with the effective interest rate method.

Furthermore, the accounting for the following items previously recognized under Canadian GAAP is eliminated:

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