CIBC Announces Third Quarter 2010 Results

TORONTO, Aug. 25 /CNW/ - CIBC (CM: TSX; NYSE) today reported net income of $640 million for the third quarter ended July 31, 2010, compared with net income of $434 million for the same period last year. Diluted earnings per share (EPS) were $1.53, compared with diluted EPS of $1.02 a year ago. Cash diluted EPS were $1.55(1), compared with cash diluted EPS of $1.04(1) a year ago.

Results for the third quarter of 2010 were affected by the following items aggregating to a negative impact of $0.11 per share:

    
    -   $138 million ($96 million after-tax, or $0.25 per share) loss from
        the structured credit run-off business; and

    -   $76 million ($53 million after-tax, or $0.14 per share) reversal of
        provision for credit losses in the general allowance.
    

Net income of $640 million for the third quarter compared with net income of $660 million for the prior quarter. Diluted EPS and cash diluted EPS of $1.53 and $1.55(1), respectively, for the third quarter compared with diluted EPS and cash diluted EPS of $1.59 and $1.61(1), respectively, for the prior quarter, which included items of note aggregating to a positive impact of $0.15 per share.

CIBC's capital position remains strong. CIBC's Tier 1 and Tangible Common Equity ratios at July 31, 2010 were 14.2% and 9.5%, respectively, up from 13.7% and 8.9%, respectively, at April 30, 2010.

Return on equity for the third quarter was 19.8%.

Core business performance

CIBC delivered solid performance and progress during the third quarter.

"The investments we are making in our retail and wholesale businesses are furthering our strength in Canada and positioning us well for the future," says Gerry McCaughey, President and Chief Executive Officer. "Given the uncertainty related to the economic recovery and the regulatory environment, we will continue to grow our businesses cautiously while maintaining balance sheet strength and expense discipline."

CIBC Retail Markets reported net income of $599 million.

Revenue of $2.5 billion was up 7% from the third quarter of 2009, the highest growth since the first quarter of 2008, supported by strong results across our personal banking, business banking and wealth management businesses, as well as higher treasury allocations.

Credit quality in CIBC's retail portfolios continued to improve. Provision for credit losses of $304 million was down from $334 million in the prior quarter and a peak of $417 million in the third quarter of 2009. Lower losses in domestic commercial banking, cards and personal lending portfolios were partially offset by higher losses in CIBC's FirstCaribbean International Bank subsidiary.

CIBC's retail business continues to make progress against its strategy to become the primary financial institution for more of its 11 million clients. During the quarter, CIBC provided clients with strong financial advice and increased access and choice by continuing to invest across its franchise:

    
    -   We announced an acquisition of $2.1 billion of credit card balances
        from Citigroup's Canadian MasterCard business. This acquisition will
        further strengthen our market-leading credit card business by
        broadening our client base and diversifying our credit card
        portfolio, making CIBC the largest dual issuer of Visa and MasterCard
        products in Canada;

    -   We completed our five-year strategic branch investment program to
        open, expand or relocate more than 70 branches more than a year ahead
        of schedule;

    -   We were voted the "Best Consumer Internet Bank" in Canada for the
        third year in a row by Global Finance magazine;

    -   CIBC recognized and thanked its 11 million clients across Canada
        during CIBC's National Customer Appreciation Day on June 11th. Client
        celebrations from coast-to-coast at CIBC's more than 1,070 branches
        included refreshments, activities and exciting soccer-themed contests
        and giveaways to show CIBC's appreciation towards its clients; and

    -   CIBC employees joined Canadians from coast-to-coast to cheer for
        their favourite teams as part of CIBC's exclusive television
        broadcast sponsorship of the 2010 FIFA World Cup(TM). CIBC's
        sponsorship included a 2-month national tour, branch events, street
        celebrations and extensive broadcast, print and online advertising.
    

Wholesale Banking reported net income of $25 million for the third quarter.

Revenue of $315 million was down from $548 million in the prior quarter, primarily driven by a loss from the structured credit run-off business compared to a gain in the prior quarter.

In CIBC's core Capital Markets and Investment Banking businesses, combined revenue of $387 million was down from $407 million in the prior quarter.

Credit quality in the corporate loan portfolios remained strong. Provision for credit losses of $29 million was up slightly from $27 million in the prior quarter, driven entirely by higher losses in the run-off businesses. In core businesses, losses were from CIBC's U.S. commercial real estate portfolio. Losses in this portfolio were down from the prior quarter and the third quarter of 2009.

Against the backdrop of a challenging environment and low levels of client activity across the industry, core business results in Wholesale Banking were solid. This performance reflects the consistency and risk control that the business set out to achieve two years ago with its renewed client-focused strategy.

Wholesale Banking had several notable achievements during the third quarter:

    
    -   CIBC acted as joint lead manager on a $5.1 billion, 2-tranche
        offering from Canada Housing Trust No. 1 in May;

    -   CIBC acted as joint lead and joint bookrunner on a 10-year,
        $1.0 billion bond offering from TELUS Corporation. This offering is
        the largest single tranche corporate offering completed to date in
        2010 and the first investment grade telecom issue of the year;

    -   CIBC acted as exclusive financial advisor to Quadra Mining Ltd. on
        its $3.5 billion merger with FNX Mining Company Inc.;

    -   CIBC acted as sole bookrunner on a US$376 million treasury offering
        for Central Fund of Canada, the largest physical gold and silver
        bullion fund in North America. This is the largest of the
        25 transactions CIBC has completed for the Central Fund Group; and

    -   CIBC acted as sole lead arranger and bookrunner on a corporate
        revolver for Enerplus of $1.0 billion, as well as co-lead arranger
        and joint bookrunner on revolving credit facilities for Teck
        Resources, Hydro One and Taqa North of US$1.0 billion, $1.25 billion
        and $1.0 billion, respectively.
    

Structured credit run-off progress

In an environment where credit market conditions were the most challenging since early 2009, CIBC continued to reduce exposure in its structured credit run-off business:

    
    -   We redeemed the underlying security of a $138 million
        (US$134 million) written credit derivative with no impact on
        earnings. As a result, the written credit derivative and related
        hedging contract with a financial guarantor matured. We recognized a
        gain of $51 million (US$50 million) from the reversal of the credit
        valuation adjustment against the financial guarantor;

    -   We terminated $343 million (US$328 million) of hedging contracts with
        a financial guarantor with no financial impact. As a result, an
        underlying trading security with a notional of $166 million
        (US$156 million) and a fair value of $66 million (US$62 million), as
        well as a written credit derivative with a notional of $177 million
        (US$172 million) and a nominal fair value, became unhedged;

    -   We terminated a $231 million (US$225 million) written credit
        derivative and assumed the related loan of the same amount. The loan
        was subsequently delivered under the terms of the related hedging
        contract with a financial guarantor with no significant impact on
        earnings;

    -   We sold an unhedged collateralized loan obligation classified as a
        loan with a notional of $227 million (US$221 million) and a carrying
        value of $214 million (US$208 million) with no significant impact on
        earnings;

    -   We assumed underlying securities of written credit derivatives with a
        notional of $883 million (US$829 million) and a fair value of
        $92 million (US$86 million) with no significant impact on earnings;
        and

    -   Normal amortization reduced the notional of our purchased credit
        derivatives with financial guarantors by $151 million
        (US$146 million).
    

As at July 31, 2010, the fair value, net of valuation adjustments, of purchased protection from financial guarantor counterparties was $1.1 billion (US$1.0 billion). Further significant losses could result, depending on the performance of both the underlying assets and the financial guarantors.

CIBC in our communities

In addition to generating strong returns for our shareholders, CIBC is committed to supporting causes that matter to our clients, our employees and our communities. This past quarter included several notable achievements:

    
    -   CIBC clients and employees in British Columbia and the Yukon
        Territories raised $435,000 for the B.C. Children's Hospital
        Foundation. Corporate donations and the generosity of CIBC employees
        and clients have contributed $6 million since 1995 to support the
        growing needs of the hospital;

    -   CIBC clients and employees raised $370,000 for Fondation Centre de
        cancérologie Charles-Bruneau at the 15th annual Tour CIBC
        Charles-Bruneau in Montreal to raise money for kids with cancer. This
        amount represents a 50% increase over last year and 35% of the Tour's
        2010 fundraising goal;

    -   CIBC was named one of Canada's 50 Most Socially Responsible
        Corporations in the annual Jantzi-Maclean's Corporate Social
        Responsibility Report. The report recognizes the top 50 corporations
        that perform best across a broad range of environmental, social, and
        governance indicators as tracked by Jantzi Research;

    -   CIBC was selected by Corporate Knights as one of the Best 50
        Corporate Citizens for 2010, marking the sixth time the bank has made
        the list since the annual ranking began in 2002. Corporate Knights
        analyzed 118 significant Canadian companies on corporate
        sustainability initiatives and responsible business practices;

    -   CIBC hosted its first external Diversity Roundtable in June as part
        of its 18th annual Diversity month. More than 60 human resources
        professionals from a range of companies, that included financial
        services, telecommunications, government, and professional consulting
        services, participated in the roundtable to share and discuss
        emerging ideas on diversity issues and trends;

    -   CIBC employees and Canadians across the country celebrated National
        Aboriginal Day, honouring the heritage, culture, and achievements of
        Aboriginal peoples. Over the past five years, CIBC has committed
        $4.5 million to organizations and programs that support our
        Aboriginal communities, including Job Readiness Training and National
        Aboriginal Achievement Foundation scholarships and bursaries for
        young Aboriginals;

    -   CIBC committed $125,000 to the Children's Hospital of Eastern Ontario
        (CHEO) Foundation's BIG STEPS campaign. The campaign aims to attract
        the best research minds, physicians and health care providers to CHEO
        and equip them with the advanced tools and technologies they need to
        care for and cure kids from Eastern Ontario and Western Quebec; and

    -   CIBC delivered a commitment of $200,000 to help the Hincks-Dellcrest
        Centre continue supporting the mental health needs of Ontario's
        infants, children and youth, and their families. Hincks-Dellcrest
        Centre also acknowledged the bank's 35 years of giving and for
        providing $1 million of consistent financial support to one of the
        largest charitable mental health organizations in Ontario.

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

The information on the following pages forms a part of this press release.

(The board of directors of CIBC reviewed this press release prior to it being issued. CIBC's controls and procedures support the ability of the President and Chief Executive Officer and the Chief Financial Officer of CIBC to certify CIBC's third quarter financial report and controls and procedures. CIBC's CEO and CFO will voluntarily provide to the Securities and Exchange Commission a certification relating to CIBC's third quarter financial information, including the attached unaudited interim consolidated financial statements, and will provide the same certification to the Canadian Securities Administrators.)

    
                    MANAGEMENT'S DISCUSSION AND ANALYSIS

    -------------------------------------------------------------------------
    Management's discussion and analysis (MD&A) should be read in conjunction
    with the unaudited interim consolidated financial statements included in
    this report and our 2009 Annual Accountability Report. The unaudited
    interim consolidated financial statements have been prepared in
    accordance with Canadian generally accepted accounting principles (GAAP)
    and are expressed in Canadian dollars. This MD&A is current as of
    August 24, 2010. Additional information relating to CIBC is available on
    SEDAR at www.sedar.com and on the U.S. Securities and Exchange
    Commission's website at www.sec.gov. No information on CIBC's website
    (www.cibc.com) should be considered incorporated herein by reference.
    Certain comparative amounts have been reclassified to conform with the
    presentation adopted in the current period. A glossary of terms used
    throughout this quarterly report can be found on pages 179 to 181 of our
    2009 Annual Accountability Report.
    -------------------------------------------------------------------------

    Contents

    5   External reporting changes

    6   Third quarter financial highlights

    7   Overview

    7   Financial results
    9   Significant events
    10  Outlook
    11  Review of quarterly financial information
    12  Non-GAAP measures
    12  Business unit allocations

    13  Run-off businesses and other selected activities

    13  Run-off businesses
    21  Other selected activities

    23  Business line overview

    23  CIBC Retail Markets
    25  Wholesale Banking
    27  Corporate and Other

    28  Financial condition

    28  Review of consolidated balance sheet
    28  Capital resources
    29  Significant capital management activity
    29  Off-balance sheet arrangements

    30  Management of risk

    30  Risk overview
    30  Credit risk
    32  Market risk
    34  Liquidity risk
    34  Other risks

    35  Accounting and control matters
    

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 "Core business performance", "Structured credit run-off progress", "Overview - Income Taxes", "Overview - Significant events", "Overview - Outlook for 2010", "Run-off businesses", "Capital Resources", "Management of Risk - Liquidity risk", 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 2010 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 2010" 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.

    
                         EXTERNAL REPORTING CHANGES
    

Retroactive changes with restatement of prior period information

First quarter:

    
    -   The global repurchase agreement (repo) business that was previously
        part of Treasury in Corporate and Other was retroactively transferred
        to capital markets within Wholesale Banking. The results of the repo
        business were previously allocated substantially to other within CIBC
        Retail Markets.

    -   Large corporate cash management revenue previously reported in
        business banking within CIBC Retail Markets was retroactively
        transferred to corporate and investment banking within Wholesale
        Banking.
    

Second and Third quarters:

There were no external reporting changes.

    
                     THIRD QUARTER FINANCIAL HIGHLIGHTS

    --------------------------------------------------- ---------------------
                                              As at or      As at or for the
                            for the three months ended     nine months ended
                       -------------------------------- ---------------------
                            2010       2010       2009       2010       2009
    Unaudited            Jul. 31    Apr. 30    Jul. 31    Jul. 31    Jul. 31
    --------------------------------------------------- ---------------------
    Financial results
     ($ millions)
    Net interest
     income            $   1,548  $   1,497  $   1,369  $   4,559  $   3,975
    Non-interest
     income                1,301      1,424      1,488      4,272      3,065
                       -------------------------------- ---------------------
    Total revenue          2,849      2,921      2,857      8,831      7,040
    Provision for
     credit losses           221        316        547        896      1,225
    Non-interest
     expenses              1,741      1,678      1,699      5,167      4,991
                       -------------------------------- ---------------------
    Income before taxes
     and non-controlling
     interests               887        927        611      2,768        824
    Income tax expense       244        261        172        791        279
    Non-controlling
     interests                 3          6          5         25         15
                       -------------------------------- ---------------------
    Net income         $     640  $     660  $     434  $   1,952  $     530
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------
    Financial measures
    Efficiency ratio       61.1%      57.5%      59.4%      58.5%      70.9%
    Cash efficiency
     ratio, taxable
     equivalent basis
     (TEB)(1)              60.6%      57.0%      59.0%      58.0%      70.1%
    Return on equity       19.8%      22.2%      14.6%      21.1%       5.1%
    Net interest margin    1.74%      1.84%      1.59%      1.78%      1.50%
    Net interest margin
     on average
     interest-earning
     assets                2.03%      2.16%      1.95%      2.09%      1.85%
    Return on average
     assets                0.72%      0.81%      0.51%      0.76%      0.20%
    Return on average
     interest-earning
     assets                0.84%      0.95%      0.62%      0.90%      0.25%
    Total shareholder
     return              (4.17)%     18.00%     25.69%     18.08%     27.77%
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------
    Common share
     information
    Per share
      - basic earnings $    1.54  $    1.60  $    1.02  $    4.72  $    1.08
      - cash basic
         earnings(1)        1.55       1.61       1.04       4.77       1.14
      - diluted
         earnings           1.53       1.59       1.02       4.71       1.08
      - cash diluted
         earnings(1)        1.55       1.61       1.04       4.76       1.14
      - dividends           0.87       0.87       0.87       2.61       2.61
      - book value         31.36      30.00      27.87      31.36      27.87
    Share price
      - high               75.40      77.19      67.20      77.19      67.20
      - low                65.91      63.16      53.02      61.96      37.10
      - closing            70.60      74.56      66.31      70.60      66.31
    Shares outstanding
     (thousands)
      - average basic    388,815    386,865    381,584    386,706    381,300
      - average diluted  389,672    387,865    382,556    387,710    381,921
      - end of period    390,781    388,462    382,657    390,781    382,657
    Market
     capitalization
     ($ millions)      $  27,589  $  28,964  $  25,374  $  27,589  $  25,374
    --------------------------------------------------- ---------------------
    Value measures
    Dividend yield
     (based on closing
     share price)           4.9%       4.8%       5.2%       4.9%       5.3%
    Dividend payout
     ratio                 56.7%      54.5%      85.0%      55.3%        n/m
    Market value to
     book value ratio       2.25       2.49       2.38       2.25       2.38
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------
    On- and off-balance
     sheet information
     ($ millions)
    Cash, deposits
     with banks and
     securities        $  92,049  $  74,930  $84,467(2) $  92,049  $84,467(2)
    Loans and
     acceptances, net
     of allowance        184,987    183,736  172,445(2)   184,987  172,445(2)
    Total assets         349,600    336,001    335,917    349,600    335,917
    Deposits             238,102    226,793    214,227    238,102    214,227
    Common
     shareholders'
     equity               12,256     11,654     10,664     12,256     10,664
    Average assets       353,092    333,589    340,661    342,599    354,585
    Average interest-
     earning assets      302,288    283,589    277,919    291,571    286,535
    Average common
     shareholders'
     equity               11,994     11,415     10,601     11,561     10,736
    Assets under
     administration(3) 1,216,719  1,219,054  1,160,473  1,216,719  1,160,473
    --------------------------------------------------- ---------------------
    Balance sheet
     quality measures
    Common equity to
     risk-weighted
     assets                11.4%      10.8%       9.2%      11.4%       9.2%
    Risk-weighted
     assets
     ($ billions)      $   107.2  $   108.3  $   115.4  $   107.2  $   115.4
    Tier 1 capital
     ratio                 14.2%      13.7%      12.0%      14.2%      12.0%
    Total capital ratio    18.1%      18.8%      16.5%      18.1%      16.5%
    --------------------------------------------------- ---------------------
    Other information
    Retail/wholesale
     ratio(4)            74%/26%    76%/24%    69%/31%    74%/26%    69%/31%
    Full-time
     equivalent
     employees            42,642     42,018     42,474     42,642     42,474
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------
    (1) For additional information, see the "Non-GAAP measures" section.
    (2) Amounts have been restated to conform to the presentation of the
        current period.
    (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) The ratio represents the amount of economic capital attributed to the
        business lines as at the end of the period.
    n/m Not meaningful.


                                  OVERVIEW
    

Financial results

Net income for the quarter was $640 million, compared to net income of $434 million for the same quarter last year and net income of $660 million for the prior quarter.

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

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

    -   $76 million ($53 million after-tax) reversal of provision for credit
        losses in the general allowance.
    

Net interest income

Net interest income was up $179 million or 13% from the same quarter last year, primarily due to higher treasury revenue, volume growth in most retail products, and higher interest income from trading securities, partially offset by lower interest income from available for sale (AFS) securities. The last year quarter included interest income on income tax reassessments.

Net interest income was up $51 million or 3% from the prior quarter, mainly due to the impact of three more days in the quarter and volume growth in most retail products, partially offset by narrower spreads. The prior quarter included reversal of interest expense on the favourable conclusion of prior years' tax audits.

Net interest income for the nine months ended July 31, 2010 was up $584 million or 15% from the same period in 2009, mainly due to wider spreads and volume growth in most retail products and higher treasury revenue, offset in part by lower interest income on AFS and trading securities.

Non-interest income

Non-interest income was down $187 million or 13% from the same quarter last year, primarily due to losses in the structured credit run-off business compared to gains in the last year quarter. The current quarter had lower trading revenue, higher fair value option (FVO) related losses, and lower underwriting and advisory fees. These factors were partly offset by higher realized gains net of write-downs on AFS securities, higher income from securitized assets, and higher wealth management related fee income. The last year quarter included mark-to-market (MTM) losses on credit derivatives in our corporate loan hedging programs.

Non-interest income was down $123 million or 9% from the prior quarter, primarily due to losses in the structured credit run-off business compared to gains in the prior quarter, and higher FVO related losses. These factors were partly offset by higher realized gains net of write-downs on AFS securities, and higher income from securitized assets and underwriting and advisory fees.

Non-interest income for the nine months ended July 31, 2010 was up $1,207 million or 39% from the same period in 2009, primarily due to gains in the structured credit run-off business compared to losses in the prior year period. The current period also benefited from higher wealth management related fee income, higher income from securitized assets, higher realized gains net of write-downs on AFS securities, and higher credit-related fee income. These factors were partly offset by lower trading revenue and higher FVO related losses. The prior year period included higher MTM losses on credit derivatives in our corporate loan hedging programs and higher gains on repatriation activities.

Provision for credit losses

The total provision for credit losses was down $326 million or 60% from the same quarter last year. The specific provision for credit losses in the consumer portfolios was down $67 million, primarily due to lower write-offs in the cards and personal lending portfolios and improvements in delinquencies in the personal lending portfolio. The specific provision for credit losses in business and government lending decreased $126 million, largely due to the improvement in our portfolios in the U.S. and Europe. The change in general provision for credit losses in the quarter was favourable by $133 million when compared with the same quarter last year. The decrease was mainly in the cards and business and government portfolios, reflecting improved economic conditions.

The total provision for credit losses was down $95 million or 30% from the prior quarter. The specific provision for credit losses in consumer portfolios was down $24 million, mainly driven by improvements in delinquencies in the cards and personal lending portfolios. The specific provision for credit losses in the business and government lending portfolio was down $11 million, largely due to lower commercial banking losses. The change in general provision for credit losses was favourable by $60 million from the prior quarter, largely attributable to improvements in delinquencies in the cards portfolio.

The total provision for credit losses for the nine months ended July 31, 2010 was down $329 million or 27% from the same period in 2009. The specific provision for credit losses in consumer portfolios was up $21 million, mainly due to the impact of lower levels of securitized assets in cards, partially offset by lower write-offs in the cards and personal lending portfolios and improvements in delinquencies in the personal lending portfolio. The specific provision for credit losses in business and government lending was down $39 million due to lower losses in our European leveraged finance run-off portfolio, partially offset by higher losses in our U.S. real estate finance portfolio. The change in general provision for credit losses for the nine months ended July 31, 2010 was favourable by $311 million when compared with the same period last year. The decrease was mainly in the cards and business and government portfolios, reflecting improved economic conditions.

Non-interest expenses

Non-interest expenses were up $42 million or 2% from the same quarter last year, primarily due to higher employee compensation and benefits driven by higher performance-related compensation, and higher pension expenses resulting from changes in certain assumptions and the market value of our plan assets. In addition, occupancy costs and advertising and business development expenses were also higher in the quarter. These factors were partially offset by lower computer-related expenses and business and capital taxes. The prior year quarter included higher litigation expenses.

Non-interest expenses were up $63 million or 4% from the prior quarter, primarily due to higher salaries driven by three more days in the quarter, and higher performance-related compensation and computer-related expenses, partially offset by lower advertising and business development expenses and occupancy costs.

Non-interest expenses for the nine months ended July 31, 2010 were up $176 million or 4% from the same period in 2009, primarily due to higher pension expenses as noted above, and higher performance-related compensation, occupancy costs, and professional fees. These factors were partially offset by lower computer-related expenses and business and capital taxes.

Income taxes

Income tax expense was up $72 million or 42% from the same quarter last year, primarily due to higher income.

Income tax expense was down $17 million or 7% from the prior quarter, mainly due to lower income.

Income tax expense for the nine months ended July 31, 2010 was up $512 million from the same period in 2009, primarily due to higher income. The prior period included $104 million of tax expense related to repatriation activities.

At the end of the quarter, our future income tax asset was $945 million, net of a $90 million (US$88 million) valuation allowance. Included in the future income tax asset are $365 million related to Canadian non-capital loss carryforwards that expire in 19 years, $54 million related to Canadian capital loss carryforwards that have no expiry date, and $309 million 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 the valuation allowance, will be realized.

On October 2, 2009 and March 17, 2010, the Canada Revenue Agency (CRA) issued reassessments disallowing the deduction of approximately $3.0 billion of the 2005 Enron settlement payments and related legal expenses. In the current quarter, CRA also proposed to disallow legal expenses related to 2006.

On April 30, 2010, we filed Notices of Appeal with the Tax Court of Canada. 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 thereon of approximately $165 million. Should we fail to defend our position in its entirety, additional tax expense of approximately $865 million and non-deductible interest thereon of $129 million would be incurred.

Final closing agreements for leveraged leases were executed with the Internal Revenue Service (IRS) in 2009. During the prior quarter, final taxable amounts and interest charges thereon were agreed with the IRS and payments applied to the various affected taxation years.

Foreign exchange

Our U.S. dollar denominated results are impacted by fluctuations in the U.S. dollar/Canadian dollar exchange rate. The Canadian dollar appreciated 6% on average relative to the U.S. dollar from the same quarter last year, resulting in a $12 million decrease in the translated value of our U.S. dollar earnings.

The Canadian dollar depreciated 2% on average relative to the U.S. dollar from the prior quarter, resulting in a $3 million increase in the translated value of our U.S. dollar earnings.

The Canadian dollar appreciated 13% on average relative to the U.S. dollar for the nine months ended July 31, 2010 from the same period in 2009, resulting in a $71 million decrease in the translated value of our U.S. dollar earnings.

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

    
    -------------------------------------------------------------------------
    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 MTM of credit derivatives in our corporate loan
        hedging programs.

    Q3, 2009
    --------
    -   $155 million ($106 million after-tax) negative impact of changes in
        credit spreads on the MTM of credit derivatives in our corporate loan
        hedging programs;
    -   $95 million ($65 million after-tax) gain on the structured credit
        run-off business;
    -   $83 million ($56 million after-tax) loan loss in our leveraged loan
        and other run-off portfolios;
    -   $42 million ($29 million after-tax) provision for credit loss in the
        general allowance;
    -   $27 million ($18 million after-tax) of a higher litigation provision
        and other operational costs;
    -   $26 million ($18 million after-tax) decrease in credit valuation
        adjustments (CVA) against other than financial guarantors derivatives
        counterparties, on non-structured credit contracts;
    -   $25 million ($17 million after-tax) interest income on income tax
        reassessments; and
    -   $22 million ($14 million after-tax) of valuation charges related to
        certain AFS positions in exited and other run-off businesses.

    Q2, 2009
    --------
    -   $475 million ($324 million after-tax) loss on the structured credit
        run-off business;
    -   $168 million ($115 million after-tax) negative impact of changes in
        credit spreads on the MTM of credit derivatives in our corporate loan
        hedging programs;
    -   $159 million ($3 million after-tax) foreign exchange gain on
        repatriation activities;
    -   $100 million ($65 million after-tax) of valuation charges related to
        certain trading and AFS positions in exited and other run-off
        businesses;
    -   $65 million ($44 million after-tax) provision for credit loss in the
        general allowance;
    -   $57 million write-off of future tax assets; and
    -   $49 million ($29 million after-tax) net loss/write-down in our legacy
        merchant banking portfolio.

    Q1, 2009
    --------
    -   $708 million ($483 million after-tax) loss on the structured credit
        run-off business;
    -   $94 million ($64 million after-tax) positive impact of changes in
        credit spreads on the MTM of credit derivatives in our corporate loan
        hedging programs;
    -   $92 million ($51 million after-tax) MTM losses relating to
        interest-rate hedges for the leveraged lease portfolio that did not
        qualify for hedge accounting;
    -   $87 million ($52 million after-tax) loss/write-down on our merchant
        banking portfolio; and
    -   $48 million ($4 million after-tax gain) of foreign exchange losses on
        repatriation activities.
    -------------------------------------------------------------------------
    

Significant events

Sale of CIBC Mellon Trust Company's Issuer Services business

On July 28, 2010, CIBC Mellon Trust Company (CMT), a 50/50 joint venture between CIBC and The Bank of New York Mellon, announced it has signed an agreement to sell its Issuer Services business (stock transfer and employee share purchase plan). The transaction is expected to close later this year. CMT's Issuer Services business results are reported in CIBC's Corporate and Other reporting segment and the results of its operations are not considered significant to CIBC's consolidated results.

Acquisition of Citi Cards Canada Inc.'s Canadian MasterCard portfolio

On June 14, 2010, we announced that we had reached a definitive agreement to acquire Citi Cards Canada Inc.'s rights and obligations in respect of their Canadian MasterCard directly owned and securitized credit card receivables to Broadway Trust (the Trust), and related assets estimated at $2.1 billion, for cash consideration of approximately $1.0 billion, subject to post closing adjustments. Approximately $0.8 billion of credit card receivables are directly owned. The Trust consists of approximately $1.3 billion of sold receivables, $1.1 billion funded externally by senior notes and $0.2 billion funded by subordinated notes which we will purchase. The acquired assets will be part of our CIBC Retail Markets reporting segment. The acquisition is expected to close in the quarter ending October 31, 2010.

Acquisition of CIT Business Credit Canada Inc.

On April 30, 2010, we obtained 100% control of CIT Business Credit Canada Inc. (CITBCC) through the acquisition of CIT Financial Ltd.'s (CIT) 50% common equity interest in CITBCC and CIT's share of the outstanding shareholder advances made to CITBCC under a Master Funding Agreement. The cash consideration was $306 million. Additional cash consideration of up to $8 million may be payable to CIT depending on certain circumstances. CITBCC was established in 2000 as a joint venture between CIBC and CIT. Subsequent to the acquisition, CITBCC was renamed CIBC Asset-Based Lending Inc.

Investment in The Bank of N.T. Butterfield & Son Limited

On March 2, 2010, we invested $155 million (US$150 million) for a direct 22.5% common equity interest in Bermuda-based The Bank of N.T. Butterfield & Son Limited (Butterfield), as part of a $570 million (US$550 million) recapitalization of Butterfield. The Carlyle Group and other institutional investors invested the remaining $415 million (US$400 million). We also invested $23 million (US$22 million) or 3.3% on March 2, 2010 indirectly in common shares of Butterfield through a private equity fund sponsored by The Carlyle Group. We had previously committed US$150 million to the fund to invest in financial services transactions.

Pursuant to a US$130 million rights offering, which closed on May 11, 2010, other investors, including Butterfield's shareholders, participated in the recapitalization by subscribing for additional common shares, which decreased the size of our direct investment to $130 million (US$125 million) or 18.8% and our indirect ownership in Butterfield to $19 million (US$18 million) or 2.7%. Our total ownership in Butterfield may decrease in the future under certain circumstances.

In addition, we have provided Butterfield with a commitment letter for a senior secured credit facility for up to US$300 million that was reduced from the original commitment letter of US$500 million during the quarter, at Butterfield's request. We also nominated two out of twelve directors on Butterfield's Board of Directors.

Outlook for 2010

Both the U.S. and Canadian economies ended 2009 on a stronger note, and some of that momentum carried over into the first half of 2010. Growth decelerated late in the spring, particularly in the U.S. where the benefits of fiscal stimulus were beginning to wane. We expect that more moderate pace to continue for the remainder of this fiscal year, with Canada's housing market declining after the interest rate increases from the Bank of Canada and new rules for insured mortgages.

CIBC Retail Markets should see a moderation in growth in mortgages, as progress in employment growth is partially offset by rising interest rates. Personal bankruptcies should continue to ease off with the recovery in the labour market. Investment product demand should be supported by rising incomes, although demand may still favour lower-risk products given ongoing uncertainties in the outlook.

Wholesale Banking activities could be affected by the potential for increased market volatility and its impact on equity issuance, but governments will remain heavy borrowers and businesses should still find debt markets attractive at historically low rates. M&A activity could also increase on improving confidence. Credit demand should be supported by inventory rebuilding, and the public debt market remains a cost-effective alternative for larger entities. U.S. real estate finance could remain slow and corporate defaults are likely to remain elevated on the lagged impacts of the past year's recession.

    
    Review of quarterly financial information

                                                2010                  2009
    -------------------------------------------------------------------------
    $ millions, except per
     share amounts, for the
     three months ended             Jul. 31    Apr. 30    Jan. 31    Oct. 31
    -------------------------------------------------------------------------
    Revenue
      CIBC Retail Markets          $  2,472   $  2,334   $  2,402   $  2,356
      Wholesale Banking                 315        548        613        503
      Corporate and Other                62         39         46         29
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue                     2,849      2,921      3,061      2,888
    Provision for credit losses         221        316        359        424
    Non-interest expenses             1,741      1,678      1,748      1,669
    -------------------------------------------------------------------------
    Income before taxes and
     non-controlling interests          887        927        954        795
    Income tax expense (benefit)        244        261        286        145
    Non-controlling interests             3          6         16          6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income (loss)              $    640  $     660   $    652  $     644
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings (loss) per share
      - basic                      $   1.54  $    1.60   $   1.59  $    1.57
      - diluted(1)                 $   1.53  $    1.59   $   1.58  $    1.56
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                2009                  2008
    -------------------------------------------------------------------------
    $ millions, except per
     share amounts, for the
     three months ended             Jul. 31    Apr. 30    Jan. 31    Oct. 31
    -------------------------------------------------------------------------
    Revenue
      CIBC Retail Markets          $  2,318   $  2,223   $  2,375   $  2,345
      Wholesale Banking                 552       (213)      (330)      (302)
      Corporate and Other               (13)       151        (23)       161
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total revenue                     2,857      2,161      2,022      2,204
    Provision for credit losses         547        394        284        222
    Non-interest expenses             1,699      1,639      1,653      1,927
    -------------------------------------------------------------------------
    Income before taxes and
     non-controlling interests          611        128         85         55
    Income tax expense (benefit)        172        174        (67)      (384)
    Non-controlling interests             5          5          5          3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income (loss)              $    434   $    (51)  $    147   $    436
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Earnings (loss) per share
      - basic                      $   1.02   $  (0.24)  $   0.29   $   1.07
      - diluted(1)                 $   1.02   $  (0.24)  $   0.29   $   1.06
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) In case of a loss, the effect of stock options potentially
        exercisable on diluted earnings (loss) per share will be
        anti-dilutive; therefore, basic and diluted earnings (loss) per share
        will be the same.
    

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.

Wholesale Banking revenue was adversely affected in 2008 and early 2009 and in the present quarter, due to the charges on credit protection purchased from financial guarantors and MTM losses related to our exposure to the U.S. residential mortgage market (USRMM). Corporate and Other revenue included foreign exchange losses on repatriation activities in the first quarter of 2009, and foreign exchange gains on repatriation activities in the second quarter of 2009 and the fourth quarter of 2008.

Retail lending provisions trended higher beginning the second half of 2008 largely due to higher losses in the cards and personal lending portfolios. This was the result of both volume growth as well as economic deterioration in the consumer sector. The cards and personal lending portfolios began to show some improvements in the first three quarters of 2010. Wholesale Banking provisions stabilized in 2010, reflecting improvement in economic conditions in both the U.S. and Europe.

Performance-related compensation was higher in the first quarter of 2010. The fourth quarter of 2008 included severance related expenses.

A $486 million income tax reduction attributable to an increase in our expected tax benefit relating to Enron-related litigation settlements was recorded in the fourth quarter of 2008. Income tax recoveries related to the favourable resolution of various income tax audits and reduced tax contingencies were included in the fourth quarter of 2008. Tax-exempt income had steadily decreased since the fourth quarter of 2008 until the third quarter of 2009. Thereafter, tax exempt income levels have remained fairly constant until increasing in the current quarter. Income tax benefits on the foreign exchange losses on repatriation activities were included in the first quarter of 2009. The second quarter of 2009 and the fourth quarter of 2008 included income tax expenses on repatriation activities. The first quarter of 2010 and the second quarter of 2009 included write-downs of future tax assets. The fourth quarter of 2009 included a tax benefit primarily from a positive revaluation of future tax assets.

Non-GAAP measures

We use a number of financial measures to assess the performance of our business lines. 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 57 of the 2009 Annual Accountability 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 strategic business units are provided in their respective sections.

    
    ----------------------------------------------------- -------------------
                                                                     For the
                              For the three months ended   nine months ended
                            ----------------------------- -------------------
    $ millions, except          2010      2010      2009      2010      2009
     per share amounts       Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Net interest income     $  1,548  $  1,497  $  1,369  $  4,559  $  3,975
    Non-interest income        1,301     1,424     1,488     4,272     3,065
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Total revenue per
     interim financial
     statements          A     2,849     2,921     2,857     8,831     7,040
    TEB adjustment       B        11         8         6        27        35
    ----------------------------------------------------- -------------------
    Total revenue
     (TEB)(1)            C  $  2,860  $  2,929  $  2,863  $  8,858  $  7,075
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Trading income
     (loss)                 $    131  $    225  $    353  $    735  $   (655)
    TEB adjustment                 9         7         5        23        32
    ----------------------------------------------------- -------------------
    Trading income (loss)
     (TEB)(1)               $    140  $    232  $    358  $    758  $   (623)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Non-interest
     expenses per
     interim financial
     statements          D  $  1,741  $  1,678  $  1,699  $  5,167  $  4,991
    Less: amortization
     of other
     intangible assets             9         9        10        28        33
    ----------------------------------------------------- -------------------
    Cash non-interest
     expenses(1)         E  $  1,732  $  1,669  $  1,689  $  5,139  $  4,958
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Net income
     applicable to
     common shares       F  $    598  $    617  $    390  $  1,825  $    411
    Add: after-tax
     effect of
     amortization of
     other intangible
     assets                        7         7         7        22        25
    ----------------------------------------------------- -------------------
    Cash net income
     applicable to
     common shares(1)    G  $    605  $    624  $    397  $  1,847  $    436
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Basic weighted-
     average common
     shares (thousands)  H   388,815   386,865   381,584   386,706   381,300
    Diluted weighted-
     average common
     shares (thousands)  I   389,672   387,865   382,556   387,710   381,921
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Cash efficiency
     ratio (TEB)(1)    E/C     60.6%     57.0%     59.0%     58.0%     70.1%
    Cash basic
     earnings per
     share(1)          G/H  $   1.55  $   1.61  $   1.04  $   4.77  $   1.14
    Cash diluted
     earnings per
     share(1)          G/I  $   1.55  $   1.61  $   1.04  $   4.76  $   1.14
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (1) Non-GAAP measure.
    

Business unit allocations

Treasury activities impact the reported financial results of CIBC's strategic business units (CIBC Retail Markets and Wholesale Banking).

Each business line is charged or credited with a market-based cost of funds on assets and liabilities, respectively, and this impacts the revenue performance of the business units. Once the interest and liquidity risk inherent in our customer-driven assets and liabilities is transfer priced into Treasury, it is managed within CIBC's risk framework and limits. The majority of the revenue from these Treasury activities is then allocated to the "Other" business lines within CIBC Retail Markets and Wholesale Banking. Treasury also allocates capital to the business units in a manner that is intended to consistently measure and align economic costs with the underlying benefits and risks associated with business unit activities. Earnings on unallocated capital and the impact of securitization activities remain in Corporate and Other. In addition, non-interest expenses are attributed to the business units to which they relate. Indirect expenses are allocated to the business units based on appropriate criteria.

We review our transfer pricing and treasury allocation methodologies on an ongoing basis to ensure they reflect changing market environments and industry practices. 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 total bank results.

    
                             RUN-OFF BUSINESSES
    

Structured credit run-off business

Overview and results

Our structured credit business, within Wholesale Banking, comprised our previous activities as principal and for client facilitation. These activities included warehousing of assets and structuring of special purpose entities (SPEs), which resulted in the holding of unhedged positions. Other activities included intermediation, correlation, and flow trading, which earned a spread on matching positions.

Exposures

Our exposures largely consist of the following categories:

    
    Unhedged
    --------
    -   USRMM
    -   non-USRMM

    Hedged
    ------
    -   financial guarantors (USRMM and non-USRMM) including unmatched
        positions where we have purchased protection but do not have exposure
        to the underlying
    -   other counterparties (USRMM and non-USRMM)
    

Results

Net loss, before taxes, for the quarter was $138 million, compared with net income, before taxes, of $95 million for the same quarter last year and $58 million for the prior quarter.

The net loss for the current quarter is a result of increases in CVA relating primarily to financial guarantors driven by widening of credit spreads, the Cerberus Capital Management LP (Cerberus) note, and losses on unmatched purchased protection. These losses were partially offset by gains from the transactions described below, the impact of higher receivables from financial guarantors on loan assets that are carried at amortized cost, and gains on unhedged positions.

Change in exposures

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

    
    -------------------------------------------------------------------------
                                                           2010         2009
    US$ millions, as at                                 Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Notional
      Investments and loans(1)                       $   12,188   $   10,442
      Written credit derivatives, liquidity
       and credit facilities                             16,056       22,710
    -------------------------------------------------------------------------
    Total gross exposures                            $   28,244   $   33,152
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Purchased credit derivatives                     $   22,656   $   32,257
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes $829 million notional that is also reported in written
        credit derivatives, see footnote 8 to the total exposures table (on
        page 15) for additional details.
    

We undertook a number of transactions during the quarter to reduce our exposures, as noted below:

    
    -   The underlying on a $138 million (US$134 million) Other non-USRMM
        written credit derivative was redeemed without any loss and therefore
        our written credit derivative as well as the related hedging contract
        with a financial guarantor (reported as counterparty "II") matured.
        The transactions resulted in a pre-tax gain of $51 million
        (US$50 million) primarily from reversal of the CVA;

    -   We terminated $343 million (US$328 million) of hedging contracts on
        Other non-USRMM exposures with a financial guarantor (reported as
        counterparty "II") for cash consideration of $15 million
        (US$14 million). There was no significant pre-tax income as a result
        of the transactions. The underlying exposures that became unhedged as
        a result of the transactions were a trading security with notional of
        $166 million (US$156 million) and fair value of $66 million
        (US$62 million) and a written credit derivative with notional of
        $177 million (US$172 million) and nominal fair value as at the
        transaction dates;

    -   We terminated a $231 million (US$225 million) written credit
        derivative with exposure to Other non-USRMM and assumed the related
        loan of the same amount. We subsequently delivered the loan under the
        terms of the related hedging contract with a financial guarantor
        (reported as counterparty "VII"). As a result, related purchased
        protection became unmatched. There was no significant pre-tax income
        as a result of the transaction;

    -   We sold an unhedged collateralized loan obligation (CLO) classified
        as a loan with notional of $227 million (US$221 million) and carrying
        value of $214 million (US$208 million) for cash consideration of
        $213 million (US$207 million), resulting in a pre-tax loss of
        $1 million (US$1 million);

    -   We assumed the USRMM underlying reference securities of written
        credit derivatives with notional of $883 million (US$829 million) and
        fair value of $92 million (US$86 million) as at the transaction date.
        There was no significant pre-tax income as a result of the
        transaction; and

    -   Normal amortization reduced the notional of our purchased credit
        derivatives with financial guarantors by $151 million
        (US$146 million).
    

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

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 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. While the Lehman estate expressed its disagreement with the actions of the indenture trustee, the estate has not instituted any legal proceeding with regard to the CDO or our VFN. The Lehman estate has, however, instituted legal proceedings involving a number of other CDOs, and in the first quarter of 2010, in Lehman Brothers Special Financing, Inc. v. BNY Corporate Trustee Services, Ltd., the U.S. bankruptcy court in New York ruled unenforceable a customary provision in a CDO transaction that reversed the priority of the payment waterfall upon the bankruptcy of Lehman, the credit support provider under a related swap agreement. That ruling, which the defendant has sought leave to appeal, does not change our belief that if contested, the trustee's actions in reducing the unfunded commitment on our VFN to zero should be upheld although there can be no certainty regarding any eventual outcome. We continue to believe that the CDO indenture trustee's actions were fully supported by the terms of the governing contracts and the relevant legal standards.

Total exposures

The exposures held within our structured credit run-off business within Wholesale Banking are summarized in the table below. Only our direct investments and exposures through written credit derivatives to consolidated CDOs are included in this table. The table excludes the protection from Cerberus on our USRMM exposures.

    
    US$ millions, as at July 31, 2010
    -------------------------------------------------------------------------
                                                Exposures(1)
                            -------------------------------------------------
                                 Investments and loans(2)     Written credit
                                                                 derivatives,
                                                               liquidity and
                                                         credit facilities(3)
                            ---------------------------- --------------------
                            Notional      Fair  Carrying  Notional      Fair
                                         value     value          value(4)(5)
                            -------------------------------------------------
    Hedged

    USRMM - CDOs            $      -  $      -  $      -  $    364  $    360
    -------------------------------------------------------------------------
    Total USRMM hedged      $      -  $      -  $      -  $    364  $    360
    -------------------------------------------------------------------------
    Non-USRMM
    ---------
      CLO                   $      -  $      -  $      -  $  3,861  $    222
      CLO classified as
       loans(6)                6,667     6,053     6,144         -         -
      Corporate debt               -         -         -     8,200       200
      Corporate debt
       (Unmatched)                 -         -         -         -         -
      CMBS (Unmatched)             -         -         -         -         -
      Other securities
       classified as
       loans(7)                  442       272       353         -         -
      Others (includes
       CMBS and TruPs)           141        71        71       344       111
      Others (Unmatched)           -         -         -         -         -
    -------------------------------------------------------------------------
    Total non-USRMM hedged  $  7,250  $  6,396  $  6,568  $ 12,405  $    533
    -------------------------------------------------------------------------
    Total hedged            $  7,250  $  6,396  $  6,568  $ 12,769  $    893
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Unhedged

    USRMM - CDOs(8)         $  3,023  $    216  $    216  $  2,288  $  2,034
    -------------------------------------------------------------------------
    Total USRMM unhedged    $  3,023  $    216  $    216  $  2,288  $  2,034
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Non-USRMM
    ---------
      CLO                   $    169  $    119  $    119  $    123  $      4
      CLO classified as
       loans                     563       531       539         -         -
      Corporate debt             169       121       121         -         -
      Montreal Accord
       related notes(3)(9)       372       188       188       292       n/a
      Third party sponsored
       ABCP conduits(3)           71        71        71        91       n/a
      Other securities
       classified as loans       268       250       236         -         -
      Others(3)(10)              303       184       184       493        16
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total non-USRMM
     unhedged               $  1,915  $  1,464  $  1,458  $    999  $     20
    -------------------------------------------------------------------------
    Total unhedged          $  4,938  $  1,680  $  1,674  $  3,287  $  2,054
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total hedged and
     unhedged               $ 12,188  $  8,076  $  8,242  $ 16,056  $  2,947
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009           $ 10,442  $  6,721  $  7,024  $ 22,710  $  4,152
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    US$ millions, as at July 31, 2010
    ---------------------------------------------------------------
                                           Hedged by
                            ---------------------------------------
                                      Purchased credit derivatives
                                                  and index hedges
                            ---------------------------------------
                                     Financial
                                    guarantors              Others
                            ------------------- -------------------
                            Notional      Fair  Notional      Fair
                                         value               value
                                        before              before
                                         CVA(4)              CVA(4)
                            ---------------------------------------
    Hedged

    USRMM - CDOs            $      -  $      -  $    364  $    360
    ---------------------------------------------------------------
    Total USRMM hedged      $      -  $      -  $    364  $    360
    ---------------------------------------------------------------
    Non-USRMM
    ---------
      CLO                   $  3,628  $    209  $    233  $     17
      CLO classified as
       loans(6)                6,472       391       209        15
      Corporate debt             800        37     7,404       170
      Corporate debt
       (Unmatched)             1,600        22         -         -
      CMBS (Unmatched)           775       536         -         -
      Other securities
       classified as
       loans(7)                  442       170         -         -
      Others (includes
       CMBS and TruPs)           291       136       213        32
      Others (Unmatched)         225       225         -         -
    ---------------------------------------------------------------
    Total non-USRMM hedged  $ 14,233  $  1,726  $  8,059  $    234
    ---------------------------------------------------------------
    Total hedged            $ 14,233  $  1,726  $  8,423  $    594
    ---------------------------------------------------------------
    ---------------------------------------------------------------

    Unhedged

    USRMM - CDOs(8)         $      -  $      -  $      -  $      -
    ---------------------------------------------------------------
    Total USRMM unhedged    $      -  $      -  $      -  $      -
    ---------------------------------------------------------------
    ---------------------------------------------------------------
    Non-USRMM
    ---------
      CLO                   $      -  $      -  $      -  $      -
      CLO classified as
       loans                       -         -         -         -
      Corporate debt               -         -         -         -
      Montreal Accord
       related notes(3)(9)         -         -         -         -
      Third party sponsored
       ABCP conduits(3)            -         -         -         -
      Other securities
       classified as loans         -         -         -         -
      Others(3)(10)                -         -         -         -
    ---------------------------------------------------------------
    ---------------------------------------------------------------
    Total non-USRMM
     unhedged               $      -  $      -  $      -  $      -
    ---------------------------------------------------------------
    Total unhedged          $      -  $      -  $      -  $      -
    ---------------------------------------------------------------
    ---------------------------------------------------------------
    Total hedged and
     unhedged               $ 14,233  $  1,726  $  8,423  $    594
    ---------------------------------------------------------------
    ---------------------------------------------------------------
    Oct. 31, 2009           $ 23,748  $  3,413  $  8,509  $    681
    ---------------------------------------------------------------
    ---------------------------------------------------------------
    (1)  We have excluded our total holdings, including holdings related to
         our treasury activities, of notional US$925 million (October 31,
         2009: US$868 million) with fair value of US$928 million (October 31,
         2009: US$865 million) in debt securities issued by Federal National
         Mortgage Association (Fannie Mae) (notional US$109 million, fair
         value US$110 million), Federal Home Loan Mortgage Corporation
         (Freddie Mac) (notional US$84 million, fair value US$84 million),
         and Government National Mortgage Association (Ginnie Mae) (notional
         US$732 million, fair value US$734 million). Trading equity
         securities with a fair value of US$1 million (October 31, 2009:
         US$1 million), issued by Student Loan Marketing Association (Sallie
         Mae), were also excluded.
    (2)  Excludes equity and surplus notes that we obtained in consideration
         for commutation of our USRMM contracts with financial guarantors
         with notional US$261 million and fair value US$18 million, as at
         July 31, 2010 (October 31, 2009: notional US$261 million and fair
         value US$39 million).
    (3)  Undrawn notional of the liquidity and credit facilities relating to
         Montreal Accord related notes amounted to US$292 million (October
         31, 2009: US$277 million), relating to third party non-bank
         sponsored asset-backed commercial paper (ABCP) conduits amounted to
         US$91 million (October 31, 2009: US$61 million), and relating to
         unhedged Other non-USRMM amounted to US$27 million (October 31,
         2009: US$15 million).
    (4)  This is the gross fair value of the contracts, which was typically
         zero, or close to zero, at the time they were entered into.
    (5)  This represents the fair value of written credit derivatives only.
    (6)  Investments and loans include unfunded investment commitments with a
         notional of US$216 million as at July 31, 2010 (October 31, 2009:
         US$247 million).
    (7)  Represents CDOs with trust preferred securities (TruPs) collateral.
    (8)  Certain underlying assets were delivered to us pursuant to terms of
         our derivative contracts. The above table includes US$829 million of
         notional and US$105 million of fair value associated with those
         reference assets. As the written credit derivatives remain, the
         US$829 million notional and liability fair value are also included
         in written credit derivatives.
    (9)  Includes estimated notional USRMM exposure of US$88 million as at
         July 31, 2010 (October 31, 2009: US$104 million).
    (10) Includes warehouse non-residential mortgage-backed securities
         (RMBS) with notional US$10 million and fair value of nil.
    n/a  Not applicable.
    

Cerberus transaction

In 2008, we transacted with Cerberus to obtain downside protection on our hedged and unhedged USRMM CDO exposures while retaining upside participation if the underlying securities recover. As at July 31, 2010, the outstanding principal and fair value of the limited recourse note issued as part of the Cerberus transaction was $531 million (US$516 million) and $428 million (US$416 million), respectively. The underlying USRMM CDO exposures, none of which are now hedged by financial guarantors, had a fair value of $477 million (US$463 million) as at July 31, 2010. During the quarter, we had a loss of $79 million (US$76 million) on the limited recourse note, including interest expense thereon.

Purchased protection from financial guarantors

The following table presents the notional amounts and fair values of non-USRMM related protection purchased from financial guarantors, and the underlying referenced assets, by counterparty. The fair value net of CVA is included in derivative instruments in other assets on the consolidated balance sheet. We no longer have USRMM related protection purchased from financial guarantors as at July 31, 2010 (October 31, 2009: notional $588 million; fair value, net of CVA $115 million).

    
    US$ millions, as at July 31, 2010
    -------------------------------------------------------------------------
                                              Notional amounts of referenced
                                                            non-USRMM assets
             Standard    Moody's  -------------------------------------------
    Counter-      and   investor             Corporate
     party     Poor's   services        CLO       debt       CMBS     Others
    -------------------------------------------------------------------------

    I           BB+(1)      B3(1)  $    318   $      -   $  777(2)  $    124
    II            R(3)    Caa2(3)       548          -          -          -
    III           -(4)       -(4)       681          -          -        115
    IV            -(4)       -(4)       534          -          -          -
    V             -(4)       -(4)     2,553          -          -          -
    VI         BBB-(5)     Ba1            -    2,400(2)         -          -
    VII         AAA(1)     Aa3(1)     4,103          -          -      225(2)
    VIII        AAA(1)     Aa3(1)     1,288          -          -        124
    IX          BB-(1)     Ba1           75          -          -        368
    -------------------------------------------------------------------------
    Total
     financial
     guarantors                    $ 10,100   $  2,400   $    777   $    956
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009                  $ 13,292   $  6,959   $    777   $  2,132
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    US$ millions, as at July 31, 2010
    ------------------------------------------------------
                                Protection purchased from
                                     financial guarantors
                         ---------------------------------
    Counter-       Total  Fair value            Fair value
     party      Notional  before CVA       CVA    less CVA
    ------------------------------------------------------

    I           $  1,219   $    617   $   (408)  $    209
    II               548         25        (17)         8
    III              796         87        (62)        25
    IV               534         33        (26)         7
    V              2,553        140        (35)       105
    VI             2,400         59        (11)        48
    VII            4,328        489        (80)       409
    VIII           1,412        122        (25)        97
    IX               443        154        (29)       125
    ------------------------------------------------------
    Total
     financial
     guarantors $ 14,233   $  1,726   $   (693)  $  1,033
    ------------------------------------------------------
    ------------------------------------------------------
    Oct. 31,
     2009       $ 23,160   $  2,880   $ (1,591)  $  1,289
    ------------------------------------------------------
    ------------------------------------------------------
    (1) Credit watch/outlook with negative implication.
    (2) Includes US$1.6 billion, US$775 million, and US$225 million of
        unmatched purchase protection related to corporate debt, commercial
        mortgage-backed securities (CMBS), and Other non-USRMM, respectively.
    (3) Under review.
    (4) Rating withdrawn or not rated.
    (5) Downgraded to BB- subsequent to July 31, 2010.
    

The total CVA loss for financial guarantors was $116 million (US$110 million) for the quarter. Separately, we recorded a net gain of $51 million (US$50 million) on maturity of contracts with a financial guarantor during the quarter.

As at July 31, 2010, CVA on credit derivative contracts with financial guarantors was $713 million (US$693 million) (October 31, 2009: $2.2 billion (US$2.0 billion)), and the fair value of credit derivative contracts with financial guarantors net of CVA was $1.1 billion (US$1.0 billion) (October 31, 2009: $1.5 billion (US$1.4 billion)). Further significant losses could result depending on the performance of both the underlying assets and the financial guarantors.

In addition, in our other run-off portfolios, we have loans and tranched securities positions that are partly secured by direct guarantees from financial guarantors or by bonds guaranteed by financial guarantors. As at July 31, 2010, these positions were performing and the total amount guaranteed by financial guarantors was approximately $71 million (US$69 million) (October 31, 2009: $75 million (US$69 million)).

The following table provides further data and description of the non-USRMM referenced assets underlying the protection purchased from financial guarantors:

    
    US$ millions, as at July 31, 2010
    -------------------------------------------------------------------------
                          Fair
                         value                Notional/        Fair value/
                     purchased                 tranche           tranche
                        protec-     Total  ---------------- -----------------
              Notional    tion tranches(1)   High      Low     High      Low
    -------------------------------------------------------------------------
    Hedged
    ------
    CLO
     (includes
     loans)    $10,100  $   600       70  $   353  $    17  $    22  $     -
    Corporate
     debt          800       37        1      800      800       37       37
    Others
      TruPs
       (includes
       loans)      531      211        9       89       32       41        9
      Non-US
       RMBS        124       61        2      106       18       52        9
      Other         78       34        1       78       78       34       34

    Unmatched
    ---------
    Corporate
     debt        1,600       22        2      800      800       16        6
    CMBS           775      536        2      453      322      288      248
    Other          225      225        1      225      225      225      225
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
               $14,233  $ 1,726       88  $ 2,904  $ 2,292  $   715  $   568
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    US$ millions, as at July 31, 2010
    ----------------------------------------------------------------
                     Investment   Subordination/
                          grade    attachment(4)     Detachment(5)
                WAL in    under- ----------------- -----------------
            years(2)(3)  lyings  Average    Range  Average    Range
    ----------------------------------------------------------------
    Hedged
    ------
    CLO
     (includes
     loans)        3.5       2%      32%   24-67%      98%  50-100%
    Corporate
     debt          3.4      48%      15%      15%      30%      30%
    Others
      TruPs
       (includes
       loans)     12.0      n/a      50%   45-57%     100%     100%
      Non-US
       RMBS        2.9      n/a      53%      53%     100%     100%
      Other        3.6      n/a      29%      29%     100%     100%

    Unmatched
    ---------
    Corporate
     debt          2.9      66%      17%   15-18%      32%   30-33%
    CMBS           4.4       8%      44%   43-46%     100%     100%
    Other          5.4      n/a       -        -      100%     100%
    -----------
    -----------

    ----------------------------------------------------------------
    ----------------------------------------------------------------
    (1) A tranche is a portion of a security offered as part of the same
        transaction where the underlying may be an asset, pool of assets,
        index or another tranche. The value of the tranche depends on the
        value of the underlying, subordination and deal specific structures
        such as tests/triggers.
    (2) The weighted average life (WAL) of the positions is impacted by
        assumptions on collateral, interest deferrals and defaults, and
        prepayments, and for TruPs CDOs, also the potential for successful
        future auctions. These assumptions and the resulting WAL, especially
        for TruPs CDOs, may change significantly from period to period.
    (3) The WAL of a tranche will typically be shorter than the WAL for the
        underlying collateral for one or more reasons relating to how cash
        flows from repayment and default recoveries are directed to pay down
        the tranche.
    (4) Subordination/attachment points are the level of losses which can be
        sustained on the collateral underlying the reference assets without
        those losses impacting the tranches shown above.
    (5) The detachment points are the level of losses on the collateral
        underlying the reference assets at which point any further losses
        cease to impact the tranches shown above.
    n/a Not available.
    

Hedged positions

    
    CLO
    ---
    

The hedged CLO underlyings consist of 70 tranches. Approximately 14% of the total notional amount of the CLO tranches was rated equivalent to AAA, 69% rated between the equivalent of AA+ and AA-, and the remainder rated between the equivalent of A+ and A-, as at July 31, 2010. Approximately 13% of the underlying collateral was rated equivalent to BB- or higher, 57% was rated between the equivalent of B+ and B-, 17% rated equivalent to CCC+ or lower, with the remainder unrated as at July 31, 2010. The collateral comprises assets in a wide range of industries with the highest concentration in the services (personal and food) industry (21%); the broadcasting, publishing and telecommunication sector (18%); and the manufacturing sector (12%). Only 3% is in the real estate sector. Approximately 70% and 26% of the underlyings represent U.S. and European exposures, respectively.

    
    Corporate debt
    --------------
    

The hedged corporate debt underlyings consist of one super senior synthetic CDO tranche that references portfolios of primarily U.S. (63%) and European (25%) corporate debt in various industries (manufacturing - 28%, financial institutions - 16%, cable and telecommunications - 11%, retail and wholesale - 3%). Approximately 8% of the total notional of US$800 million of the corporate debt underlyings were rated equivalent to A- or higher, 40% were rated between the equivalent of BBB+ and BBB-, 37% were rated equivalent to BB+ or lower, with the remainder unrated as at July 31, 2010.

    
    Others
    ------
    

Other hedged positions include CDOs with TruPs collateral, which are Tier I Innovative Capital Instruments issued by U.S. regional banks and insurers, non-U.S. RMBS (such as European residential mortgages) and other assets including tranches of CDOs, and CMBS.

Unmatched positions

    
    Corporate debt
    --------------
    

The unmatched corporate debt underlyings consist of two super senior synthetic CDO tranches that reference portfolios of primarily U.S. (55%) and European (33%) corporate debt in various industries (manufacturing - 30%, financial institutions - 7%, cable and telecommunications - 14%, retail and wholesale - 9%). Approximately 21% of the total notional amount of US$1.6 billion of the unmatched corporate debt underlyings were rated equivalent to A- or higher, 45% were rated between the equivalent of BBB+ and BBB-, 23% were rated equivalent to BB+ or lower, with the remainder unrated as at July 31, 2010.

    
    CMBS
    ----
    

The two synthetic tranches reference unmatched CMBS portfolios which are backed by pools of commercial real estate mortgages located primarily in the U.S. Approximately 8% of the underlyings were rated between the equivalent of BBB and BBB-, 11% were rated between the equivalent of BB+ and BB-, 30% were rated between the equivalent of B+ and B-, with the remainder rated equivalent to CCC+ or lower, as at July 31, 2010.

    
    Other
    -----
    

Other unmatched position underlying is a loan backed by film receivables.

Purchased protection from other counterparties

The following table provides the notional amounts and fair values, before CVA of US$7 million (October 31, 2009: US$8 million) of purchased credit derivatives from non-financial guarantor counterparties, excluding unmatched purchased credit derivatives:

    
    -------------------------------------------------------------------------
                                      USRMM related       Non-USRMM related
                                  --------------------- ---------------------
                                                  Fair                  Fair
    US$ millions, as at            Notional      value   Notional      value
    -------------------------------------------------------------------------
    Non-bank financial
     institutions                  $    364   $    360   $     50   $      3
    Banks                                 -          -        603         61
    Canadian conduits                     -          -      7,404        170
    Others                                -          -          2          -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                   $    364   $    360   $  8,059   $    234
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                    Total
                                  -------------------------------------------
                                         Notional             Fair value
                                   -------------------- ---------------------
                                       2010       2009       2010       2009
    US$ millions, as at             Jul. 31    Oct. 31    Jul. 31    Oct. 31
    -------------------------------------------------------------------------
    Non-bank financial
     institutions                  $    414   $    437   $    363   $    350
    Banks                               603        862         61         86
    Canadian conduits                 7,404      7,166        170        245
    Others                                2          2          -          -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                   $  8,423   $  8,467   $    594   $    681
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

The non-financial guarantor counterparty hedging our USRMM exposures is a large U.S.-based diversified multinational insurance and financial services company with which CIBC has market standard collateral arrangements. Approximately 99% of other counterparties hedging our non-USRMM exposures have internal credit ratings equivalent to investment grade.

The assets underlying the exposure hedged by counterparties other than financial guarantors are as below:

    
    -------------------------------------------------------------------------
                               USRMM
                             related        Non-USRMM related
                           ---------- ---------------------------------------
                            Notional            Notional
                           ---------- ---------------------------------------
    US$ millions, as at                        Corporate
     July 31, 2010             CDO(1)    CLO(2)     debt   Other(3)    Total
    -------------------------------------------------------------------------
    Non-bank financial
     institutions           $    364  $      -  $      -  $     50  $     50
    Banks                          -       442         -       161       603
    Canadian conduits              -         -     7,404         -     7,404
    Others                         -         -         -         2         2
    -------------------------------------------------------------------------
    Total assets            $    364  $    442  $  7,404  $    213  $  8,059
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The US$364 million represents super senior CDO with approximately 66%
        sub-prime RMBS, 4% Alt-A RMBS, 15% ABS CDO, and 15% non-USRMM. Sub-
        prime and Alt-A are all pre-2006 vintage.
    (2) All underlyings are non-investment grade. 5% is North American
        exposure and 95% is European exposure. Major industry concentration
        is in the services industry (33%), the manufacturing sector (14%),
        the broadcasting and communication industries (12%), and only 4% is
        in the real estate sector.
    (3) Approximately 91% of the underlyings are investment grade or
        equivalent based on internal ratings with the majority of the
        exposure located in the U.S. and Europe. The industry concentration
        is primarily banking and financial institutions, manufacturing,
        broadcasting, publishing and telecommunication, with approximately 2%
        in the real estate sector.
    

Canadian conduits

We purchased credit derivative protection from Canadian conduits and generated revenue by selling the same protection to third parties. The reference portfolios consist of diversified indices of corporate loans and bonds. These conduits are in compliance with their collateral posting arrangements and have posted collateral exceeding current market exposure. Great North Trust is sponsored by CIBC and MAV I was party to the Montreal Accord.

    
    -------------------------------------------------------------------------
                                                        Mark-to-  Collateral
    US$ millions,                                        market          and
     as at                                              (before    guarantee
     July 31, 2010       Underlying     Notional(1)         CVA) notionals(2)
    -------------------------------------------------------------------------
    Great North       Investment grade
     Trust             corporate
                       credit index(3)  $    4,806   $      154   $      291
    MAV I             160 Investment
                       grade
                       corporates(4)         2,598           16          337
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                        $    7,404   $      170   $      628
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) These exposures mature within 3 to 7 years.
    (2) Comprises investment grade notes issued by third-party sponsored
        conduits, corporate floating rate notes, banker's acceptances (BA),
        and funding commitments. The fair value of the collateral at July 31,
        2010 was US$641 million (October 31, 2009: US$571 million).
    (3) Consists of a static portfolio of 126 North American corporate
        reference entities that were investment grade rated when the index
        was created. 79% of the entities are rated BBB- or higher. 100% of
        the entities are U.S. entities. Financial guarantors represent
        approximately 2% of the portfolio. 4% of the entities have
        experienced credit events. Original attachment point is 30% and there
        is no direct exposure to USRMM or the U.S. commercial real estate
        market.
    (4) The underlying portfolio consists of a static portfolio of 160
        corporate reference entities of which 91% were investment grade on
        the trade date. 82% of the entities are currently rated BBB- or
        higher (investment grade). 58% of the entities are U.S. entities.
        Financial guarantors represent approximately 3% of the portfolio. 2%
        of the entities have experienced credit events. Original attachment
        point is 20% and there is no direct exposure to USRMM or the U.S.
        commercial real estate market.
    

Unhedged USRMM exposures

Our remaining net unhedged exposure (excluding the Cerberus protection noted above) to the USRMM, after write-downs, was $483 million (US$470 million) as at July 31, 2010. $416 million (US$405 million) of the net unhedged exposure relates to super senior CDOs of mezzanine RMBS.

Unhedged non-USRMM exposures

Our unhedged exposures to non-USRMM primarily relate to the following categories: CLO, corporate debt, Montreal Accord related notes, third party non-bank sponsored ABCP conduits, and other.

CLO

Our unhedged CLO exposures, including those classified as loans, with notional of $0.9 billion (US$0.9 billion) are mostly tranches rated equivalent to AA or higher as at July 31, 2010, and are primarily backed by diversified pools of U.S. and European-based senior secured leveraged loans.

Corporate debt

Approximately 65%, 12% and 23% of the unhedged corporate debt exposures with notional of $173 million (US$169 million) are related to positions in Canada, Europe, and other countries, respectively.

Montreal Accord related notes

As at July 31, 2010, we held variable rate Class A-1 and Class A-2 notes and various tracking notes with a combined fair value of $193 million, and remaining notional value of $383 million that were originally received in exchange for our non-bank sponsored ABCP in January 2009, upon the ratification of the Montreal Accord restructuring. The notes are expected to mature in December 2016 and are backed by fixed income, traditional securitization and CDO assets, as well as, super senior credit default swaps on investment grade corporates. The underlying assets that have U.S. subprime mortgage exposures have been isolated and are specifically linked to tracking notes with a notional value of $90 million and a fair value of $8 million as at July 31, 2010.

We have provided $300 million of undrawn Margin Funding Facility to be used if the amended collateral triggers of the related credit derivatives are breached and the new trusts created under the restructuring plan do not have sufficient assets to meet any collateral calls. If the loan facility was fully drawn and subsequently more collateral was required due to breaching further collateral triggers, we would not be obligated to fund any additional collateral, although the consequence would likely be the loss of that $300 million loan.

During the first quarter, we reached a settlement with the Ontario Securities Commission relating to our participation in the ABCP market. Our total loss for the nine months ended July 31, 2010 from the settlement, MTM and dispositions was $39 million.

Third party non-bank sponsored ABCP conduits

We provided liquidity and credit related facilities to third party non- bank sponsored ABCP conduits. As at July 31, 2010, $167 million (US$162 million) of the facilities remained committed, which mostly relate to U.S. CDOs. As at July 31, 2010, $73 million (US$71 million) of the committed facilities was drawn. Of the undrawn facilities, $13 million (US$12 million) was subject to liquidity agreements under which the conduits maintain the right to put their assets back to CIBC at par. The underlying assets of the U.S. CDOs have maturities ranging from one to eight years.

Other

Other unhedged exposures with notional of $1.1 billion (US$1.1 billion) include $108 million (US$105 million) credit facilities (drawn US$78 million and undrawn US$27 million) provided to SPEs with lottery receivables (29%) and U.S. mortgage defeasance loans (71%).

Included in the above are $711 million (US$691 million) of securities and written protection on tranches of high yield corporate debt portfolios and inflation linked notes with 55% rated the equivalent of AA- or higher, 10% rated between the equivalent of A+ and A-, with the remaining rated equivalent to BB+ or lower.

Other unhedged exposures classified as loans with notional of $276 million (US$268 million) represent primarily investment grade asset-backed and corporate debt securities.

European leveraged finance (ELF)

We provided leveraged finance to non-investment grade customers to facilitate their buyout, acquisition and restructuring activities. We generally underwrote leveraged financial loans and syndicated the majority of the loans, earning a fee during the process. We stopped transacting new ELF business in 2008.

Exposures of ELF loans (net of write-downs and allowance for credit losses) by industry are as below:

    
    -------------------------------------------------------------------------
    $ millions, as at July 31, 2010                       Drawn      Undrawn
    -------------------------------------------------------------------------
    Manufacturing                                    $      214   $       76
    Hardware and software                                   206           20
    Wholesale trade                                         193            9
    Publishing and printing                                  32            9
    Business services                                        15           15
    Telecommunications                                       12           13
    Utilities                                                10            -
    Transportation                                           10           10
    -------------------------------------------------------------------------
    Total exposure                                   $      692   $      152
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009                                    $      834   $      162
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

As at July 31, 2010, we had drawn leveraged loans of $716 million (October 31, 2009: $894 million) and unfunded letters of credit and commitments of $152 million (October 31, 2009: $162 million). The drawn and undrawn amounts include non-impaired notional of $529 million and $68 million, respectively, in respect of certain facilities that were restructured in current and prior quarters. Of the drawn loans, $72 million (October 31, 2009: $99 million) relating to restructured facilities were considered impaired, for which an allowance of $24 million as at July 31, 2010 (October 31, 2009: $60 million) has been applied. As a result of restructuring in the quarter, undrawn commitments of $29 million were cancelled. In addition, of the total non-impaired loans and commitments, $371 million was on the credit watch list as at July 31, 2010.

    
                          OTHER SELECTED ACTIVITIES
    

In response to the recommendations of the Financial Stability Forum, this section provides additional details on other selected activities.

Securitization business

Our securitization business provides clients access to funding in the debt capital markets. We sponsor several multi-seller conduits in Canada that purchase pools of financial assets from our clients, and finance the purchases by issuing ABCP to investors. We generally provide the conduits with commercial paper backstop liquidity facilities, securities distribution, accounting, cash management and other financial services.

As at July 31, 2010, our holdings of ABCP issued by our non-consolidated sponsored multi-seller conduits that offer ABCP to external investors was $32 million (October 31, 2009: $487 million) and our committed backstop liquidity facilities to these conduits was $2.7 billion (October 31, 2009: $4.0 billion). We also provided credit facilities of $40 million (October 31, 2009: $50 million) and banker's acceptances of $72 million (October 31, 2009: $69 million) to these conduits as at July 31, 2010.

The following table shows the underlying collateral and the average maturity for each asset type in these multi-seller conduits:

    
    -------------------------------------------------------------------------
                                                                   Estimated
                                                                    weighted
                                                                   avg. life
    $ millions, as at July 31, 2010                    Amount(1)      (years)
    -------------------------------------------------------------------------
    Asset class
    Credit cards                                     $      975        2.6(2)
    Canadian residential mortgages                          586        1.3
    Franchise loans                                         495        0.5
    Auto leases                                             189        0.6
    Equipment leases/loans                                   54        0.9
    Other                                                    67        1.0
    -------------------------------------------------------------------------
                                                     $    2,366        1.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009                                    $    3,612        1.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The committed backstop liquidity facility of these assets was the
        same as the amounts noted in the table, other than for franchise
        loans and other, for which the facility was $750 million and $100
        million, respectively.
    (2) Based on the revolving period and amortization period contemplated in
        the transaction.
    

The short-term notes issued by the conduits are backed by the above assets. The performance of the above assets has met the criteria required to retain the credit ratings of the notes issued by the multi-seller conduits.

We also participated in a syndicated facility for a 364 day 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. At July 31, 2010 we funded $72 million (October 31, 2009: $69 million) by the issuance of banker's acceptances.

We also securitize our mortgages and credit card receivables. Details of our consolidated variable interest entities and securitization transactions during the quarter are provided in Note 5 to the interim consolidated financial statements.

U.S. real estate finance

In our U.S. real estate finance business, we operate a full-service platform which originates commercial mortgages to mid-market clients, under three programs. The construction program offers floating-rate financing to properties under construction. The interim program offers fixed and floating- rate financing for properties that are fully leased or with some leasing or renovation yet to be done. These programs provide feeder product for the group's permanent fixed-rate loan program and typically have an average term of one to three years.

Once the construction and interim phases are complete and the properties are income producing, borrowers are offered fixed-rate financing within the permanent program (typically with average terms of 10 years).

The business also maintains CMBS trading and distribution capabilities. As at July 31, 2010, we had CMBS inventory with a notional amount of $10 million (US$9 million) and a fair value of less than $1 million (US$1 million) (October 31, 2009: less than $1 million (US$1 million)).

The following table provides a summary of our positions in this business:

    
    -------------------------------------------------------------------------
    US$ millions, as at July 31, 2010                     Drawn      Undrawn
    -------------------------------------------------------------------------
    Construction program                             $      124   $       28
    Interim program                                       1,956          203
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total exposure                                   $    2,080   $      231
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009                                    $    2,209   $      236
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

As at July 31, 2010, $354 million (US$345 million) (October 31, 2009: $279 million (US$257 million)) of funded loans were considered impaired and $165 million (US$160 million) of loans and $3 million (US$2 million) of undrawn commitments were included in the credit watch list. As at July 31, 2010, the allowance for credit losses for this portfolio was $158 million (US$154 million). During the quarter, we recorded a provision for credit losses of $18 million (US$17 million).

U.S. leveraged finance

We sold our U.S. leveraged finance business as part of our sale of some of our U.S. businesses to Oppenheimer Holdings Inc. (Oppenheimer) in fiscal 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 $2.1 billion (US$2.0 billion) to finance and hold syndicated loans originated for U.S. middle market companies by Oppenheimer. Underwriting of any loan for inclusion in this facility is subject to joint credit approval by Oppenheimer and CIBC. Exposures of our U.S. leveraged loans, including loans originated through Oppenheimer (net of allowance for credit losses of $27 million (US$26 million) as at July 31, 2010) are summarized in the table below.

    
    -------------------------------------------------------------------------
    US$ millions, as at July 31, 2010                     Drawn    Undrawn(1)
    -------------------------------------------------------------------------
    Transportation                                   $      109   $       54
    Gaming and lodging                                       72           42
    Healthcare                                               63          114
    Media and advertising                                    24           15
    Manufacturing                                            29           94
    Other                                                    24           78
    -------------------------------------------------------------------------
    Total exposure                                   $      321   $      397
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009                                    $      370   $      575
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes unfunded letters of credit of US$29 million (October 31,
        2009: US$36 million).
    

As at July 31, 2010, we had $14 million (US$13 million) of net impaired loans, and $124 million (US$121 million) of loans and $10 million (US$10 million) of undrawn commitments included in the credit watch list. No provision for credit losses was recognized during the quarter.

    
                             CIBC RETAIL MARKETS
    

CIBC Retail Markets comprises CIBC's personal banking, business banking and wealth management businesses. We provide a full range of financial products and services to almost 11 million clients in Canada, as well as investment management services globally to retail and institutional clients in Hong Kong, Singapore, and the Caribbean. In addition, we offer a full range of financial services to clients in over 17 regional markets in the Caribbean through FirstCaribbean International Bank (FirstCaribbean).

    
    Results(1)
    ----------------------------------------------------- -------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    $ millions               Jul. 31   Apr. 30 Jul. 31(2)  Jul. 31 Jul. 31(2)
    ----------------------------------------------------- -------------------
    Revenue
      Personal banking      $  1,605  $  1,554  $  1,518  $  4,760  $  4,370
      Business banking           350       324       332     1,005       948
      Wealth management          336       345       318     1,027       938
      FirstCaribbean             141       165       169       463       553
      Other                       40       (54)      (19)      (47)      107
    ----------------------------------------------------- -------------------
    Total revenue (a)          2,472     2,334     2,318     7,208     6,916
    Provision for credit
     losses                      304       334       417     1,003     1,020
    Non-interest expenses (b)  1,352     1,330     1,310     3,996     3,890
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Income before taxes
     and non-controlling
     interests                   816       670       591     2,209     2,006
    Income tax expense           214       178       170       581       564
    Non-controlling interests      3         5         5        13        15
    ----------------------------------------------------- -------------------
    Net income (c)          $    599  $    487  $    416  $  1,615  $  1,427
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Efficiency ratio (b/a)      54.7%     57.0%     56.6%     55.4%     56.3%
    Amortization of other
     intangible assets (d)  $      7  $      7  $      8  $     21  $     25
    Cash efficiency ratio(3)
     ((b-d)/a)                  54.4%     56.7%     56.2%     55.2%     55.9%
    Return on equity(3)         45.9%     38.3%     33.2%     42.2%     38.3%
    Charge for economic
     capital(3) (e)         $   (179) $   (176) $   (171) $   (528) $   (504)
    Economic profit(3)
     (c+e)                  $    420  $    311  $    245  $  1,087  $    923
    Full-time equivalent
     employees                29,174    28,944    29,322    29,174    29,322
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (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 of the current period.
    (3) For additional information, see the "Non-GAAP measures" section.
    

Financial overview

Net income for the quarter was $599 million, an increase of $183 million or 44% from the same quarter last year. Revenue increased by 7% as a result of solid volume growth in personal banking and business banking, higher treasury allocations and higher fees and commissions, partially offset by the impact of a stronger Canadian dollar and lower volume in FirstCaribbean. Provision for credit losses was down 27% from the same quarter last year. Expenses increased as a result of higher performance-related compensation and pension expense.

Net income was up $112 million or 23% compared with the prior quarter as revenue increased by 6% due to higher treasury allocations and the impact of three more days in the quarter.

Net income for the nine months ended July 31, 2010 was $1,615 million, an increase of $188 million or 13% from the same period in 2009. Revenue increased by 4% as a result of wider spreads, volume growth and higher fees and commissions, partially offset by lower treasury allocations and the impact of a stronger Canadian dollar on FirstCaribbean. The growth in revenue was partially offset by higher expenses.

Revenue

Revenue was up $154 million or 7% from the same quarter last year.

Personal banking revenue was up $87 million or 6%, driven by solid volume growth across most products and higher fee income.

Business banking revenue was up $18 million or 5%, primarily due to solid volume growth across most products.

Wealth management revenue was up $18 million or 6%, primarily due to market driven increases in asset values, partially offset by lower trading commissions.

FirstCaribbean revenue was down $28 million or 17%, primarily due to the impact of a stronger Canadian dollar, and lower volume and treasury allocations.

Other revenue was up $59 million due to higher treasury allocations.

Revenue was up $138 million from the prior quarter.

Personal banking revenue was up $51 million, primarily due to three more days in the quarter, solid volume growth, and higher fees, offset in part by narrower spreads.

Business banking revenue was up $26 million, primarily due to solid volume growth and three more days in the quarter.

Wealth management revenue was down $9 million, mainly due to lower trading commissions.

FirstCaribbean revenue was down $24 million, primarily due to lower securities gains.

Other revenue was up $94 million due to higher treasury allocations.

Revenue for the nine months ended July 31, 2010 was up $292 million or 4% from the same period in 2009.

Personal banking revenue was up $390 million or 9%, primarily due to wider spreads and volume growth in most products.

Business banking revenue was up $57 million or 6%, due to higher commercial banking fees, wider spreads, and solid volume growth primarily in deposits.

Wealth management revenue was up $89 million or 9%, mainly due to market driven increases in asset values.

FirstCaribbean revenue was down $90 million or 16%, mainly due to a stronger Canadian dollar, lower treasury allocations and volumes, and narrower spreads, partially offset by higher securities gains.

Other revenue was down $154 million due to lower treasury allocations.

Provision for credit losses

Provision for credit losses was down $113 million or 27% from the same quarter last year. The decrease related to lower provisions in the cards, personal lending and commercial banking portfolios.

Provision for credit losses was down $30 million or 9% from the prior quarter largely due to decreases in the commercial banking, cards, and personal lending portfolios, partially offset by a higher FirstCaribbean provision.

Provision for credit losses for the nine months ended July 31, 2010 was down $17 million or 2% from the same period in 2009, largely due to decreases in the personal lending, cards and small business lending portfolios, partially offset by increases in FirstCaribbean and commercial banking portfolios.

Non-interest expenses

Non-interest expenses were up $42 million or 3% from the same quarter last year. The increase was primarily due to higher performance-related compensation and pension expense, partially offset by lower litigation provisions.

Non-interest expenses were up $22 million or 2% from the prior quarter. The increase was primarily due to higher employee compensation and benefits resulting from three more days in the quarter.

Non-interest expenses for the nine months ended July 31, 2010 were up $106 million or 3% from the same period in 2009, largely due to higher employee compensation and benefits driven by higher performance-related compensation, partially offset by lower litigation provisions and the impact of a stronger Canadian dollar on FirstCaribbean.

Income taxes

Income taxes were up $44 million from the same quarter last year, mainly due to higher income, partially offset by a lower effective tax rate.

Income taxes were up $36 million from the prior quarter due to higher income.

Income taxes for the nine months ended July 31, 2010 were up $17 million from the prior period, primarily due to higher income, partially offset by a lower effective tax rate.

    
                              WHOLESALE BANKING
    

Wholesale Banking provides a wide range of capital markets, credit, 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 nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    $ millions               Jul. 31   Apr. 30 Jul. 31(2)  Jul. 31 Jul. 31(2)
    ----------------------------------------------------- -------------------
    Revenue (TEB)(3)
      Capital markets       $    241  $    275  $    336  $    793  $  1,004
      Corporate and
       investment banking        146       132       232       490       614
      Other                      (61)      149       (10)      220    (1,574)
    ----------------------------------------------------- -------------------
    Total revenue
     (TEB)(3) (a)                326       556       558     1,503        44
    TEB adjustment                11         8         6        27        35
    ----------------------------------------------------- -------------------
    Total revenue (b)            315       548       552     1,476         9
    Provision for credit
     losses                       29        27       129        80       136
    Non-interest expenses (c)    258       244       272       820       815
    ----------------------------------------------------- -------------------
    Income (loss) before
     taxes and
     non-controlling
     interests                    28       277       151       576      (942)
    Income tax expense
     (benefit)                     3        87        61       166      (310)
    Non-controlling
     interests                     -         1         -        12         -
    ----------------------------------------------------- -------------------
    Net income (loss) (d)   $     25  $    189  $     90  $    398  $   (632)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Efficiency ratio (c/b)      81.4%     44.5%     49.2%     55.5%       n/m
    Amortization of other
     intangible assets (e)  $      -  $      -  $      -  $      1  $      -
    Cash efficiency ratio
     (TEB)(3) ((c-e)/a)         78.9%     43.9%     48.6%     54.5%       n/m
    Return on equity(3)          4.4%     43.3%     13.8%     27.9%   (34.2)%
    Charge for economic
     capital(3) (f)         $    (61) $    (61) $    (83) $   (193) $   (271)
    Economic (loss)
     profit(3) (d+f)        $    (36) $    128  $      7  $    205  $   (903)
    Full-time equivalent
     employees                 1,134     1,068     1,108     1,134     1,108
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (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 of the current period.
    (3) For additional information, see the "Non-GAAP measures" section.
    n/m Not meaningful.
    

Financial overview

Net income for the current quarter was $25 million, compared to net income of $90 million in the same quarter last year. This was mainly due to losses in the structured credit run-off business compared to gains in the last year quarter, and lower revenue from capital markets and the U.S. real estate finance portfolio, partially offset by a lower provision for credit losses. The last year quarter included MTM losses on corporate loan hedges.

Net income was down $164 million from the prior quarter, mainly due to losses in the structured credit run-off business compared to gains in the prior quarter, and lower capital markets revenue. The prior quarter included a reversal of interest expense related to the favourable conclusion of prior years' tax audits.

Net income for the nine months ended July 31, 2010 was $398 million compared to a net loss of $632 million in the same period in 2009, mainly due to gains in the structured credit run-off and legacy merchant banking businesses compared to losses in the same period last year and lower MTM losses on corporate loan hedges, partially offset by lower capital markets and corporate and investment banking revenue.

Revenue (TEB)(3)

Revenue was down $232 million from the same quarter last year.

Capital markets revenue was down $95 million, primarily due to lower fixed income and global derivatives revenue.

Corporate and investment banking revenue was down $86 million, mainly due to lower revenue from U.S. real estate finance and lower gains net of write- downs in the core merchant banking portfolio.

Other revenue was down $51 million, primarily due to losses in the structured credit run-off business compared to gains in the same quarter last year. The last year quarter also included MTM losses on corporate loan hedges.

Revenue was down $230 million from the prior quarter.

Capital markets revenue was down $34 million, mainly due to lower fixed income trading and global derivatives revenue, partially offset by higher revenue from equity issuances.

Corporate and investment banking revenue was up $14 million, primarily due to higher revenue from equity issuances, M&A, and corporate lending activities, partially offset by lower gains net of write-downs in the core merchant banking portfolio.

Other revenue was down $210 million due to losses in the structured credit run-off business compared to gains in the prior quarter and the reversal of interest expense in the prior quarter noted above.

Revenue for the nine months ended July 31, 2010 was up $1,459 million from the same period in 2009.

Capital markets revenue was down $211 million, primarily due to lower revenue from global derivatives and strategic risk, fixed income trading, foreign exchange revenue, and lower equity issuance activity.

Corporate and investment banking revenue was down $124 million, primarily due to lower revenue from U.S. real estate finance, and lower corporate lending and equity issuance activities.

Other revenue was up $1,794 million, primarily due to gains in the structured credit and other run-off portfolios, and gains in the legacy merchant banking portfolio, compared to losses in the prior year period. MTM losses on corporate loan hedges were lower in the current period.

Provision for credit losses

Provision for credit losses was down $100 million from the same quarter last year, mainly due to lower losses in the European run-off and U.S. real estate finance portfolios.

Provision for credit losses was up $2 million from the prior quarter.

Provision for credit losses for the nine months ended July 31, 2010 was down $56 million from the same period in 2009, mainly due to lower losses in the European run-off portfolio.

Non-interest expenses

Non-interest expenses were down $14 million or 5% from the same quarter last year, primarily due to lower performance-related compensation.

Non-interest expenses were up $14 million or 6% from the prior quarter, primarily due to higher employee salaries and performance-related compensation.

Non-interest expenses for the nine months ended July 31, 2010 were up $5 million or 1% from the same period in 2009, primarily due to higher employee salaries and benefits and the ABCP settlement, partially offset by lower performance-related compensation and business and capital taxes.

Income taxes

Income tax expense was $3 million compared to $61 million in the same quarter last year and $87 million in the prior quarter, primarily due to lower income in the current quarter.

Income tax expense for the nine months ended July 31, 2010 was $166 million compared to a benefit of $310 million for the same period in 2009, primarily due to the impact of the structured credit run-off business losses in the prior year period.

    
                             CORPORATE AND OTHER
    

Corporate and Other comprises the five functional groups - Technology and Operations; Corporate Development; Finance (including Treasury); Administration; and Risk Management - that support CIBC's business lines. It also includes the CIBC Mellon joint ventures, and other income statement and balance sheet items, including the general allowance, not directly attributable to the business lines. The general allowance applicable to FirstCaribbean is determined locally and is included in CIBC Retail Markets. The impact of securitization is retained within Corporate and Other. The remaining revenue and expenses are generally allocated to the business lines.

    
    Results(1)
    ----------------------------------------------------- -------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    $ millions               Jul. 31   Apr. 30 Jul. 31(2)  Jul. 31 Jul. 31(2)
    ----------------------------------------------------- -------------------
    Total revenue           $     62  $     39  $    (13) $    147  $    115
    (Reversal of) provision
     for credit losses          (112)      (45)        1      (187)       69
    Non-interest expenses        131       104       117       351       286
    ----------------------------------------------------- -------------------
    Income (loss) before
     taxes                        43       (20)     (131)      (17)     (240)
    Income tax expense
     (benefit)                    27        (4)      (59)       44        25
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Net income (loss)       $     16  $    (16) $    (72) $    (61) $   (265)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Full-time equivalent
     employees                12,334    12,006    12,044    12,334    12,044
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (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 of the current period.
    

Financial overview

Net income in the current quarter was $16 million compared to a net loss of $72 million in the same quarter last year. Net loss for the nine months ended July 31, 2010 was down $204 million compared to the same period in the prior year. This was primarily due to a lower provision for credit losses in the general allowance and higher unallocated treasury revenue, partially offset by higher unallocated corporate support costs. The same quarter last year included interest income on income tax reassessments.

Net income in the current quarter was $16 million compared to a net loss of $16 million in the prior quarter, primarily due to a lower provision for credit losses in the general allowance and higher unallocated treasury revenue, partially offset by higher unallocated corporate support costs.

Revenue

Revenue was up $75 million from the same quarter last year, mainly due to higher unallocated treasury revenue. The last year quarter included interest income on income tax reassessments.

Revenue was up $23 million from the prior quarter, mainly due to higher unallocated treasury revenue.

Revenue for the nine months ended July 31, 2010 was up $32 million from the same period in 2009, mainly due to higher unallocated treasury revenue. The prior year period included higher foreign exchange gains on repatriation activities and interest income on income tax reassessments.

(Reversal of) provision for credit losses

Reversal of credit losses was $112 million in the current quarter and $187 million for the nine months ended July 31, 2010, compared to a provision of $1 million in the same quarter last year and a provision of $69 million in the same period last year. This was primarily due to a lower provision for credit losses in the general allowance for the cards and business and government portfolios, reflective of improving economic conditions.

Reversal of credit losses was up $67 million from the prior quarter, primarily due to a lower provision for credit losses in the general allowance attributable to improvements in delinquencies in the cards portfolio.

Non-interest expenses

Non-interest expenses were up $14 million from the same quarter last year, up $27 million from the prior quarter, and up $65 million for the nine months ended July 31, 2010 from the same period in 2009, primarily due to higher unallocated corporate support costs.

Income taxes

Income tax expense was $27 million compared with an income tax benefit of $59 million in the same quarter last year and an income tax benefit of $4 million in the prior quarter, primarily due to higher income in the current quarter.

Income tax expense for the nine months ended July 31, 2010 was up $19 million from the same period in 2009, primarily due to higher income, partially offset by lower write-downs of future tax assets. The prior year period included $104 million tax expense on repatriation activities.

    
                             FINANCIAL CONDITION

    Review of consolidated balance sheet
    -------------------------------------------------------------------------
                                                           2010         2009
    $ millions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Assets
    Cash and deposits with banks                     $   14,413   $    7,007
    Securities                                           77,636       77,576
    Securities borrowed or purchased under resale
     agreements                                          32,084       32,751
    Loans, net of allowance                             177,678      167,212
    Derivative instruments                               23,886       24,696
    Other assets                                         23,903       26,702
    -------------------------------------------------------------------------
    Total assets                                     $  349,600   $  335,944
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities and shareholders' equity
    Deposits                                         $  238,102   $  223,117
    Derivative instruments                               26,287       27,162
    Obligations related to securities lent or sold
     short or under repurchase agreements                43,646       43,369
    Other liabilities                                    19,321       22,090
    Subordinated indebtedness                             6,067        5,157
    Preferred share liabilities                             600          600
    Non-controlling interests                               165          174
    Shareholders' equity                                 15,412       14,275
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity       $  349,600   $  335,944
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Assets

As at July 31, 2010 total assets were up $13.6 billion or 4% from October 31, 2009.

Cash and deposits with banks increased by $7.4 billion, mainly due to higher treasury deposit placements.

Securities overall were at the same levels as at October 31, 2009. Included in securities are trading, AFS and FVO securities. Trading securities increased mainly in the equity trading portfolio. AFS decreased mainly in the government issued bonds. FVO securities decreased mainly due to reductions in our inventory of mortgage-backed securities (MBS).

Securities borrowed and purchased under resale agreements were down $0.7 billion or 2% on decreased client demand.

Loans increased by $10.5 billion or 6% primarily due to mortgage originations, partially offset by new securitizations, principal repayments and liquidations.

Derivative instruments decreased by $0.8 billion or 3%, primarily due to a decrease in valuations of credit derivatives, equity derivatives and interest rate derivatives, partially offset by an increase in valuations of foreign exchange derivatives.

Other assets decreased by $2.8 billion or 10%, mainly due to lower banker's acceptances, collateral pledged, and future income tax assets.

Liabilities

As at July 31, 2010, total liabilities were up $12.5 billion or 4% from October 31, 2009.

Deposits increased by $15.0 billion or 7% largely due to issuance of covered bonds and medium term notes, retail volume growth, and reclassification of certain payables from other liabilities in the first quarter.

Derivative instruments decreased by $0.9 billion or 3% due to the same reasons noted above for derivative assets.

Obligations related to securities lent or sold short or under repurchase agreements increased by $0.3 billion or 1% reflecting our funding requirements and client-driven activities.

Other liabilities decreased by $2.8 billion or 13% largely due to reclassification of certain payables to deposits as noted above and lower banker's acceptances.

Subordinated indebtedness increased by $0.9 billion or 18% mainly as a result of an issuance of debentures as explained in "Significant capital management activity" below.

Shareholders' equity

Shareholders' equity increased by $1.1 billion or 8% 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.

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 65 to 69 of the 2009 Annual Accountability Report.

Regulatory capital

Regulatory capital is determined in accordance with guidelines issued by the Office of the Superintendent of Financial Institutions (OSFI).

The following table presents the changes to the components of our regulatory capital:

    
    -------------------------------------------------------------------------
                                                           2010         2009
    $ millions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Tier 1 capital                                   $   15,179   $   14,154
    Tier 2 capital                                        4,179        4,673
    Total regulatory capital                             19,358       18,827
    Risk-weighted assets                                107,176      117,298
    Tier 1 capital ratio                                  14.2%        12.1%
    Total capital ratio                                   18.1%        16.1%
    Assets-to-capital multiple                            16.6x        16.3x
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Tier 1 capital ratio was up 2.1% and the total capital ratio was up 2.0% from year-end. The capital ratios benefited from lower risk-weighted assets (RWAs) and an increase in both Tier 1 and total regulatory capital.

The $10.1 billion decrease in RWAs from year-end was largely attributable to a decrease in structured credit exposure to financial guarantors, the effect of a strengthening Canadian dollar on foreign currency denominated assets, and updates to advanced internal ratings based (AIRB) model parameters.

Tier 1 and total regulatory capital increased from year-end mainly due to internal capital generation and the issuance of common shares. The total regulatory capital as at July 31, 2010, also reflected the $1,100 million 4.11% Debentures issued on April 30, 2010 and the planned redemption of our $1,300 million 3.75% Debentures on September 9, 2010 as noted below.

Significant capital management activity

On July 26, 2010, we announced our intention to redeem all $1,300 million of our 3.75% Debentures (subordinated indebtedness) due September 9, 2015. In accordance with their terms, the debentures will be redeemed at 100% of their principal amount, plus accrued and unpaid interest, on September 9, 2010.

On April 30, 2010, we issued $1,100 million principal amount of 4.11% Debentures (subordinated indebtedness) due April 30, 2020. The debentures qualify as Tier 2 regulatory capital.

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 on our offbalance sheet arrangements are provided on pages 70 to 72 of the 2009 Annual Accountability Report.

The following table summarizes our exposures to nonconsolidated entities involved in the securitization of third-party assets (both CIBC sponsored/structured and third-party structured). Investments and loans are stated at carrying value. Undrawn liquidity and credit facilities and written credit derivatives are notional amounts.

    
                                                                        2010
    $ millions, as at                                                Jul. 31
    -------------------------------------------------------------------------
                                                                     Written
                                                        Undrawn       credit
                                        Investment    liquidity  derivatives
                                               and   and credit    (notional)
                                        loans(1)(4)  facilities        (2)(4)
    -------------------------------------------------------------------------
    CIBC-sponsored conduits             $      104   $  2,495(3)  $        -
    CIBC structured CDO vehicles               459         47            385
    Third-party structured vehicles
     - run-off                               7,741        643          5,248
    Third-party structured vehicles
     - continuing                            2,218          -              -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                                        2009
    $ millions, as at                                                Oct. 31
    -------------------------------------------------------------------------
                                                                     Written
                                                        Undrawn       credit
                                        Investment    liquidity  derivatives
                                               and   and credit    (notional)
                                        loans(1)(4)  facilities        (2)(4)
    -------------------------------------------------------------------------
    CIBC-sponsored conduits             $      556   $  3,108(3)  $        -
    CIBC structured CDO vehicles               737         66            652
    Third-party structured vehicles
     - run-off                               6,676        650         11,110
    Third-party structured vehicles
     - continuing                            1,695          -              -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excludes securities issued by, retained in, and derivatives with
        entities established by Canada Mortgage and Housing Corporation,
        Fannie Mae, Freddie Mac, Ginnie Mae, Federal Home Loan Banks, Federal
        Farm Credit Bank, and Sallie Mae. $6.6 billion (October 31, 2009:
        $6.1 billion) of the exposure related to CIBC structured CDO and
        third-party structured vehicles was hedged by credit derivatives.
    (2) Comprises credit derivatives (written options and total return swaps)
        under which we assume exposures. The negative fair value recorded on
        the consolidated balance sheet was $1.2 billion (October 31, 2009:
        $4.1 billion). Notional of $4.6 billion (October 31, 2009:
        $10.7 billion) were hedged with credit derivatives protection from
        third parties, the fair value of these hedges net of CVA was
        $0.6 billion (October 31, 2009: $0.6 billion). Accumulated fair value
        losses amount to $0.5 billion (October 31, 2009: $2.5 billion) on
        unhedged written credit derivatives.
    (3) Net of $104 million (October 31, 2009: $556 million) of investment
        and loans in CIBC sponsored conduits.
    (4) In 2009, we consolidated certain third-party structured CDOs after
        determining that we are the primary beneficiary following the
        commutation of our protection from a financial guarantor. The table
        above excludes our investments (fair values of $156 million and $69
        million as at July 31, 2010 and October 31, 2009, respectively) in,
        and written credit derivatives (notional of $1.8 billion and negative
        fair value of $1.6 billion, as at July 31, 2010; and notional of $1.9
        billion and negative fair value of $1.7 billion, as at October 31,
        2009) on, the notes of these CDOs.
    

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

    
                             MANAGEMENT OF RISK
    

Our approach to management of risk has not changed significantly from that described on pages 73 to 88 of the 2009 Annual Accountability 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 in the "Governance" section included within the 2009 Annual Accountability 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
        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 over Wealth
        Management.
    -   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, managing the risks of our investment portfolios, as well as
        management of the special loans portfolios.
    -   Risk Services - This unit is responsible for a range of activities,
        including: regulatory and economic capital reporting; operational
        risk management; and vetting and validating of models and parameters.
        Risk Services is also responsible for various risk policies including
        those associated with credit, operational, and 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 $510.6 billion as at July 31, 2010 (October 31, 2009: $486.8 billion). Overall exposure was up $23.8 billion, with the increase across both the retail and business and government portfolios. The following table shows the gross EAD, before credit risk mitigation:

    
    -------------------------------------------------------------------------
                                                           2010         2009
    $ millions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Business and government portfolios-AIRB approach
    Drawn                                            $  102,302   $  102,449
    Undrawn commitments                                  25,088       22,368
    Repo-style transactions                              82,014       83,805
    Other off-balance sheet                              48,867       34,841
    OTC derivatives                                      13,969       15,257
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross EAD on business and government portfolios  $  272,240   $  258,720
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Retail portfolios-AIRB approach
    Drawn                                            $  139,953   $  130,028
    Undrawn commitments                                  68,188       67,323
    Other off-balance sheet                                 410          412
    -------------------------------------------------------------------------
    Gross EAD on retail portfolios                   $  208,551   $  197,763
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Standardized portfolios                          $   12,315   $   12,916
    Securitization exposures                             17,534       17,446
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross EAD                                        $  510,640   $  486,845
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Included in the business and government portfolios-AIRB approach is EAD of $0.9 billion in the probability of default band considered watch list as at July 31, 2010 (October 31, 2009: $1.9 billion). The decrease in watch list exposures was broad based across most industries and geographic regions. The financial services sector is the largest contributor to the watch list exposures, including financial guarantor exposures discussed in more detail in our "Run-off businesses" section.

Counterparty credit exposures

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 2009 consolidated financial statements.

We establish a CVA for expected future credit losses from each of our derivative counterparties. As at July 31, 2010, the CVA for all derivative counterparties was $760 million (October 31, 2009: $2.2 billion).

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

    
    -------------------------------------------------------------------------
                                              2010                      2009
    $ billions, as at                      Jul. 31                   Oct. 31
    -------------------------------------------------------------------------
    Standard & Poor's rating
     equivalent
    -------------------------
    AAA to BBB-            $     6.09         83.7%   $    6.12         75.5%
    BB+ to B-                    0.92         12.6         1.42         17.5
    CCC+ to CCC-                 0.23          3.1         0.42          5.1
    Below CCC-                   0.03          0.5         0.08          1.0
    Unrated                      0.01          0.1         0.07          0.9
    -------------------------------------------------------------------------
                           $     7.28        100.0%   $    8.11        100.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                           2010         2009
    $ millions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Gross impaired loans
    Consumer                                         $      792   $      727
    Business and government(1)                            1,250        1,184
    -------------------------------------------------------------------------
    Total gross impaired loans                       $    2,042   $    1,911
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Allowance for credit losses
    Consumer                                         $    1,096   $    1,132
    Business and government(1)                              877          828
    -------------------------------------------------------------------------
    Total allowance for credit losses                $    1,973   $    1,960
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Comprises:
    Specific allowance for loans(2)                  $      817   $      735
    General allowance for loans(2)                        1,156        1,225
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total allowance for credit losses                $    1,973   $    1,960
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes scored small business portfolios which are managed on a pool
        basis under Basel II.
    (2) Excludes specific and general allowance for letters of credit and
        undrawn credit facilities of nil and $64 million, respectively
        (October 31, 2009: $1 million and $82 million, respectively).
    

Gross impaired loans were up $131 million or 7% from October 31, 2009. Consumer gross impaired loans were up $65 million or 9%, primarily due to increased new classifications in residential mortgages. Business and government gross impaired loans were up $66 million or 6%, mainly due to increases in the business services, real estate and construction, and retail sectors, partially offset by decreases in the financial institutions, publishing, printing and broadcasting sectors.

The total allowance for credit losses was up $13 million or 1% from October 31, 2009. Canadian and U.S. allowances for credit losses make up 75% and 13%, respectively of the total allowance. The specific allowance was up $82 million or 11% from October 31, 2009. The increase was largely due to increases in the real estate and construction, and business services sectors, partially offset by a decrease in the publishing, printing and broadcasting sector. The general allowance for credit losses was down $69 million or 6% from October 31, 2009, with decreases in both consumer and business and government lending, reflecting improved economic conditions.

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

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 June 2010, the Basel Committee on Banking Supervision announced the delay of the implementation of revisions to the Basel II market risk framework until December 2011. We are working on a series of enhancements to our Value- at-Risk (VaR) models in order to meet the new regulatory requirements and ensure more complete risk capture, which will increase our VaR measure. We expect implementation of these enhancements to begin in fiscal 2011 and be completed within the revised timeline for revisions to the Basel II market risk framework of fiscal first quarter 2012.

Trading activities

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

The VaR for the three months ended July 31, 2010 disclosed in the table and backtesting chart below, excludes our exposures in our run-off businesses as described on pages 13 to 20 of the MD&A. Due to volatile and illiquid markets, the quantification of risk for these positions is subject to a high degree of uncertainty. These positions are being managed down independent of our trading businesses.

Total average risk was down 12% from the last quarter, driven mainly by a reduction in our foreign exchange, equity and interest rate risks, partly offset by an increase in debt specific risk.

Actual realized 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(1)
    ---------------------------------------

    -------------------------------------------------------------------------
                                         As at or for the three months ended
    -------------------------------------------------------------------------
                                                                        2010
                                                                     Jul. 31
                                  -------------------------------------------
    $ millions                         High        Low      As at    Average
    -------------------------------------------------------------------------
    Interest rate risk            $     6.2  $     1.7  $     4.0  $     3.6
    Credit spread risk                  0.8        0.4        0.6        0.6
    Equity risk                         1.3        0.6        0.9        0.8
    Foreign exchange risk               1.7        0.3        1.0        0.8
    Commodity risk                      0.8        0.2        0.6        0.5
    Debt specific risk                  2.5        1.5        1.5        1.9
    Diversification effect(2)           n/m        n/m       (3.8)      (3.7)
    -----------------------------                      ----------------------
    -----------------------------                      ----------------------
    Total risk                    $     6.8  $     2.7  $     4.8  $     4.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                         As at or for the three months ended
    -------------------------------------------------------------------------
                                                  2010                  2009
                                               Apr. 30               Jul. 31
                                  -------------------------------------------
    $ millions                        As at    Average      As at    Average
    -------------------------------------------------------------------------
    Interest rate risk            $     5.0  $     4.1  $     6.3  $     3.9
    Credit spread risk                  0.7        0.4        0.7        0.9
    Equity risk                         1.2        1.3        1.3        1.5
    Foreign exchange risk               1.6        1.4        0.5        0.8
    Commodity risk                      0.7        0.4        0.5        0.7
    Debt specific risk                  1.8        1.5        1.2        2.6
    Diversification effect(2)          (5.4)      (4.0)      (4.1)      (5.2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total risk                    $     5.6  $     5.1  $     6.4  $     5.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    ---------------------------------------------------
                                          For the nine
                                          months ended
    ---------------------------------------------------
                                       2010       2009
                                    Jul. 31    Jul. 31
                                  ---------------------
    $ millions                      Average    Average
    ---------------------------------------------------
    Interest rate risk            $     3.5  $     4.0
    Credit spread risk                  0.5        1.4
    Equity risk                         1.2        3.2
    Foreign exchange risk               1.0        0.9
    Commodity risk                      0.5        0.7
    Debt specific risk                  1.6        2.9
    Diversification effect(2)          (3.9)      (6.5)
    ---------------------------------------------------
    ---------------------------------------------------
    Total risk                    $     4.4  $     6.6
    ---------------------------------------------------
    ---------------------------------------------------
    (1) The table excludes exposures in our run-off businesses.
    (2) 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.
    

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 89% of the days in the quarter. Trading losses did not exceed VaR during the quarter. Average daily trading revenue (TEB)(1) was $3 million during the quarter.

The trading revenue (TEB)(1) for the current quarter excludes a loss of $57 million related to changes in exposures and fair values of structured credit assets, as well as trading gains of $2 million related to gains from other positions in the run-off books.

    
    Backtesting of trading revenue (TEB)(1) vs. VaR
    -----------------------------------------------

    (image appears here)

    (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 (ALM) 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 these risks.

The following table shows the potential impact over the next twelve months, adjusted for estimated prepayments, of an immediate 100 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
    ---------------------------------------

    -------------------------------------------------------------------------
                                                2010                    2010
                                             Jul. 31                 Apr. 30
                              -----------------------------------------------
    $ millions, as at              $     US$   Other       $     US$   Other
    -------------------------------------------------------------------------
    100 basis points increase
     in interest rates
    Net income after tax       $ 110   $ (43)  $   4   $  50   $ (54)  $   6
    Change in present value
     of shareholders' equity(1)  (54)    (25)     (7)    (15)   (115)      -

    100 basis points decrease
     in interest rates
    Net income after tax       $(173)  $  21   $  (4)  $ (64)  $  35   $  (5)
    Change in present value
     of shareholders' equity(1)   54      25       7      63      95       -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------
                                                2009
                                             Jul. 31
                              -----------------------
    $ millions, as at              $     US$   Other
    -------------------------------------------------
    100 basis points increase
     in interest rates
    Net income after tax       $ 132   $  (9)  $   8
    Change in present value
     of shareholders' equity(1)  193     (16)     (5)

    100 basis points decrease
     in interest rates
    Net income after tax       $  17   $   8   $  (9)
    Change in present value
     of shareholders' equity(1) (195)     16       5
    -------------------------------------------------
    -------------------------------------------------
    (1) Commencing this quarter, amounts reported exclude the impact of
        structural assumptions relating to shareholders' equity.
    

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 $108.8 billion, as at July 31, 2010 (October 31, 2009: $104.3 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.

CIBC was an active issuer of term debt during the quarter, raising US$2.25 billion and CHF 500 million through covered bond issuances, and over $2 billion through the issuance of Canadian deposit notes.

Balance sheet liquid assets are summarized in the following table:

    
    -------------------------------------------------------------------------
                                                           2010         2009
    $ billions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Cash                                             $      1.4   $      1.2
    Deposits with banks                                    13.1          5.8
    Securities issued by Canadian governments(1)           10.1         16.8
    Mortgage-backed securities(1)                          16.7         19.4
    Other securities(2)                                    40.3         31.0
    Securities borrowed or purchased under resale
     agreements                                            32.1         32.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total assets                                     $    113.7   $    107.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) These represent securities with residual term to contractual maturity
        of more than one year.
    (2) Comprises 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, 2010 totalled $43.3 billion (October 31, 2009: $36.7 billion).

Access to wholesale funding sources and the cost of funds are dependent on various factors including credit ratings. On June 16, 2010, DBRS changed CIBC's outlook from negative to stable. There have been no other changes to our credit ratings and outlook during the quarter at major credit rating agencies.

Our funding and liquidity levels remained stable and sound over the period and we do not anticipate any events, commitments or demands which 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 86 to 87 of the 2009 Annual Accountability 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 87 to 88 of the 2009 Annual Accountability Report.

    
                       ACCOUNTING AND CONTROL MATTERS
    

Critical accounting policies and estimates

A summary of significant accounting policies is presented in Note 1 to the 2009 consolidated financial statements.

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 made for pension and other benefit plans, see pages 89 to 95 of the 2009 Annual Accountability Report.

Valuation of financial instruments

In addition to our debt and equity trading securities and obligations related to securities sold short, all derivative contracts, AFS securities other than private equities, and FVO financial instruments are carried at fair value. Our FVO financial instruments include certain debt securities, business and government loans, and business and government bank 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 (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-market observable inputs (Level 3), for the total bank and the structured credit business:

    
    -------------------------------------------------------------------------
                                        Structured
                                            credit
                                           run-off        Total        Total
    $ millions, as at July 31, 2010       business         CIBC       CIBC(1)
    -------------------------------------------------------------------------
    Assets
      Trading securities                $    1,517   $    1,518          7.3%
      AFS securities                            20        3,239          8.7
      FVO securities and loans                  28           39          0.2
      Derivative instruments                 1,692        1,819          7.6
    -------------------------------------------------------------------------
    Liabilities
      FVO deposits                      $      925   $      925         46.4%
      Derivative instruments                 3,047        3,833         14.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Represents percentage of Level 3 assets and liabilities in each
        reported category on our interim consolidated balance sheet.
    

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 generally driven off market-observed credit spreads where available. 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 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 expect no future credit degradation.

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

Our interest-only strips from the sale of securitized assets are sensitive to 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 are sensitive to credit spreads which we consider to be a non-observable market input.

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 structured credit exposures (USRMM and non-USRMM) 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 $48 million in our unhedged USRMM portfolio and $111 million in our non-USRMM portfolio, excluding unhedged non-USRMM positions classified as loans which are carried at amortized cost, and before the impact of the Cerberus transaction. The fair value of the Cerberus protection against USRMM positions is expected to reasonably offset any changes in the fair value of USRMM positions.

For our hedged positions there are two categories of sensitivities, the first of which relates to our hedged loan portfolio and the second of which 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 $41 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 $11 million, assuming current CVA ratios remain unchanged. There is no impact from the Cerberus transaction because none of the underlying USRMM CDO exposures are now hedged by financial guarantors.

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 result in a net gain of approximately $21 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 $108 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 $26 million.

A 20 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 $94 million.

A 10% reduction in the MTM of our on-balance sheet asset-backed securities that are valued using non-observable credit and liquidity spreads would result in a decrease in OCI of approximately $213 million.

The net loss recognized in the consolidated statement of operations on the financial instruments, for which fair value was estimated using a valuation technique requiring non-observable market parameters, for the quarter ended July 31, 2010 was $561 million (for the quarter ended July 31, 2009: net gain of $607 million). We apply judgment in establishing valuation adjustments that take into account various factors that may have an impact on the valuation. Such factors include, but are not limited to, the bid-offer spread, illiquidity due to lack of market depth, parameter uncertainty and other market risk, model risk, credit risk and future administration costs.

During the second quarter, we reassessed our estimate of valuation adjustments for administration (servicing) costs relating to our derivatives portfolio. These valuation adjustments are based on our estimates of what a market participant would require from a fair value perspective to compensate for future servicing costs on our portfolio. This reassessment led to a release of $25 million of valuation adjustments.

The following table summarizes our valuation adjustments:

    
    -------------------------------------------------------------------------
                                                           2010         2009
    $ millions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Trading securities
      Market risk                                    $        2   $        7
    Derivatives
      Market risk                                            72           81
      Credit risk                                           760        2,241
      Administration costs                                    6           33
      Other                                                   2            2
    -------------------------------------------------------------------------
    Total valuation adjustments                      $      842   $    2,364
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

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. The levels of fair value adjustments and the amount of the write-downs could be changed as events warrant and may not reflect ultimate realizable amounts.

Accounting developments - Transition to International Financial Reporting Standards (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 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 us 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 which we are currently in. The execution phase commenced with a detailed analysis of the IFRS standards and continues through to pre-implementation of the new accounting, disclosures and business processes. The focus of this phase is to prepare policies, processes, technology, strategies, reporting, and stakeholders for the upcoming transition. The final conversion phase will report on the new IFRS standards in 2012 and reconcile Canadian GAAP and IFRS with fiscal 2011 comparative information.

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.

Process controls and technology

Pursuant to our plans, an initial assessment was previously completed to identify the IFRS standards that represent key accounting differences from Canadian GAAP. More detailed assessment work was completed in the first two quarters of fiscal 2010, including execution work with respect to the underlying financial reporting and business processes and controls. During 2010, we expect to complete the development and implementation of the business processes and controls that will enable us to restate our comparative opening November 1, 2010 consolidated balance sheet and fiscal 2011 consolidated financial statements to IFRS, while at the same time preparing normal course fiscal 2011 Canadian GAAP financial information. We have completed the development of a technology based comparative year reporting tool to track IFRS financial information during our fiscal 2011 comparative year. The reporting tool is currently being tested and will be operational by the end of fiscal 2010.

We also expect to continue to develop the business processes and controls related to transaction 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 have identified additional resource and process requirements as part of our assessment and execution work, we have not identified any significant modifications for our supporting information technology systems, nor do we expect any significant changes to our business activities. Identified technology impacts include the realignment of system feeds to more efficiently report our securitized mortgages on the consolidated balance sheet.

During the remainder of 2010, we also expect to complete the refresh of our existing assessment of the incremental disclosures required under IFRS, including extensive disclosures required in respect of the initial transition to IFRS.

Concurrent with preparing for the impact of IFRS on our financial reporting, we have also focused 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 and controls.

Communications and training

Information regarding the progress of the project continued to be communicated to internal stakeholders during the first three quarters of fiscal 2010, including our Audit Committee, senior executives and the Program Steering Committee, and to external stakeholders including OSFI and our external auditor. Communications to external stakeholders will continue through the quarterly and annual reports. In addition, we are currently preparing for additional external communications with the investor community.

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 consult 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 continue to implement our training program during fiscal 2010, which includes separate learning paths for both: (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 our Canadian clients and counterparties. While the majority of the training is expected to be completed during fiscal 2010, additional training will be provided as required.

Financial impacts

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 full restatement, available under the transitional rules that we continue to evaluate. The most significant election is in the area of accounting for post employment benefits in which we have the choice to either restate our existing unamortized net actuarial losses to what they would have been had we always followed IFRS or to charge them to retained earnings at transition. Other significant elections include: (i) whether we should restate prior business combinations to reflect IFRS differences concerning business acquisition accounting or to only apply IFRS differences to business acquisitions that may arise subsequent to transition; (ii) whether to charge our cumulative foreign currency translation account to retained earnings at transition; and (iii) whether to reclassify certain of our financial instruments in or out of the "fair value option" at transition. During the third quarter of 2010, the International Accounting Standards Board (IASB) issued a pronouncement proposing an additional transitional election with respect to changing the grandfathering date for determining which securitizations are derecognized from the consolidated balance sheet under IFRS from January 1, 2004 to any date up to transition, which for CIBC is November 1, 2010.

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. Other areas include, but are not limited to measurement and impairment of financial instruments, accounting for share-based compensation, consolidations, accounting for foreign exchange, accounting for joint ventures, and measurement of loss contingencies.

OSFI has issued guidance allowing banks to phase-in over five quarters most of the negative impacts that IFRS will have on their Tier 1 Capital. In addition, OSFI has indicated that mortgages that come back on the consolidated balance sheet with respect to securitizations completed prior to March 31, 2010 under the Canada Mortgage Bond (CMB) program will not negatively impact their capital leverage ratio.

    
    Derecognition of financial instruments
    --------------------------------------
    

There are differences between Canadian GAAP and existing IFRS concerning the determination of whether financial instruments should be derecognized from the consolidated balance sheet. Under IFRS, the determination of whether a financial asset should be derecognized is based to a greater extent on the transfer of risks and rewards rather than on whether the assets have been legally isolated from the transferee.

As a result, securitization transactions are much more likely to be accounted for as secured borrowings rather than as sales, which will result in an increase to total assets recorded on our consolidated balance sheet, and a charge to retained earnings at transition in respect of gains previously recorded from off-balance sheet accounting, particularly in respect of residential mortgages securitized through the creation of MBS under the CMB program and Government of Canada National Housing Act MBS Auction process. The on-balance sheet treatment for securitized mortgages may also impact our hedging strategies.

The proposed change to IFRS 1 permitting transfers that occur after November 1, 2010 to be exempted from these requirements could reduce the initial impact of these accounting rules, although we may elect to still apply the rules retroactively. Regardless, the impact to our capital ratios will be partially offset by the transitional relief offered by OSFI.

    
    Pension and other employee future benefits
    ------------------------------------------
    

The IFRS 1 accounting election for post employment benefits may also negatively impact our capital ratios through charging net unamortized actuarial losses to retained earnings at transition, although this election would also reduce post transitional compensation expense through the elimination of amortization expense that would otherwise occur. The impact at transition will be dependent on the discount rates and asset values inherent in our November 1, 2010 actuarial valuation.

Other elections related to the accounting for actuarial gains and losses that may arise after transition also have the potential to impact our capital and earnings. Regardless of the alternative chosen, we will record in expense the cost of benefits incurred during the year, plus the interest cost on the obligation net of the expected returns on the assets. However, the IASB has issued an exposure draft proposing significant changes to the accounting for employee future benefits which are likely to become mandatory in a fiscal period sometime after our transition to IFRS.

    
    Consolidation
    -------------
    

The IFRS requirements for consolidation are based on a control model as set out in the criteria in IAS 27, whereas under Canadian GAAP the determination is either based on a control model or beneficial interest model depending on whether the entity is considered a variable interest entity. Furthermore, IFRS does not embody the concept of a qualifying special purpose entity, which is exempted from consolidation under Canadian GAAP. As a result, certain entities are likely to be consolidated by CIBC under IFRS that are currently not consolidated under Canadian GAAP, which could impact CIBC in a similar manner to the derecognition rules noted above.

    
    Share based payments
    --------------------
    

Under IFRS, the cost of share based payments is generally recognized over the vesting period of the award, while the impact of forfeitures is estimated upfront. Conversely, under Canadian GAAP we recognize the cost of the awards in the year preceding the grant if the award is for past service, while we recognize forfeitures on an as incurred basis.

    
    Business combinations
    ---------------------
    

Under IFRS, there is a greater use of fair value measurement in the accounting for business combinations, including the measurement of non-controlling interests and contingent consideration and the use of the closing date, rather than the announcement date, to value share consideration. In addition, transaction costs and certain restructuring costs that were able to be capitalized in the purchase equation under Canadian GAAP must be expensed under IFRS. These differences will impact purchase price allocations and the amount of goodwill recorded on the consolidated balance sheet. However, IFRS 1 allows entities to only apply these changes to business acquisitions that occur after transition.

Proposed changes to the IFRS accounting standards, including the changes related to employee future benefits noted above, 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 2012. During the first three quarters of fiscal 2010, 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, accounting elections that have not yet been finalized, 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 transition plans accordingly.

Controls and procedures

Disclosure controls and procedures

CIBC's management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness, as at July 31, 2010, of CIBC's disclosure controls and procedures (as defined in the rules of the Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are 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, 2010, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

    
                  INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)


                         CONSOLIDATED BALANCE SHEET
    -------------------------------------------------------------------------
                                                           2010         2009
    Unaudited, $ millions, as at                        Jul. 31      Oct. 31
    ------------------------------------------------------------ ------------
    ASSETS
    Cash and non-interest-bearing deposits
     with banks                                      $    2,023   $    1,812
    ------------------------------------------------------------ ------------
    Interest-bearing deposits with banks                 12,390        5,195
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    Securities (Note 3)
    Trading                                              20,838       15,110
    Available-for-sale (AFS)                             38,037       40,160
    Designated at fair value (FVO)                       18,761       22,306
    ------------------------------------------------------------ ------------
                                                         77,636       77,576
    ------------------------------------------------------------ ------------
    Securities borrowed or purchased under
     resale agreements                                   32,084       32,751
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    Loans
    Residential mortgages                                96,049       86,152
    Personal                                             34,000       33,869
    Credit card                                          11,601       11,808
    Business and government                              38,001       37,343
    Allowance for credit losses (Note 4)                 (1,973)      (1,960)
    ------------------------------------------------------------ ------------
                                                        177,678      167,212
    ------------------------------------------------------------ ------------
    Other
    Derivative instruments                               23,886       24,696
    Customers' liability under acceptances                7,309        8,397
    Land, buildings and equipment                         1,612        1,618
    Goodwill                                              1,917        1,997
    Software and other intangible assets                    579          669
    Other assets (Note 9)                                12,486       14,021
    ------------------------------------------------------------ ------------
                                                         47,789       51,398
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
                                                     $  349,600   $  335,944
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Deposits
    Personal                                         $  113,059   $  108,324
    Business and government                             118,207      107,209
    Bank                                                  6,836        7,584
    ------------------------------------------------------------ ------------
                                                        238,102      223,117
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    Other
    Derivative instruments                               26,287       27,162
    Acceptances                                           7,309        8,397
    Obligations related to securities sold short          8,824        5,916
    Obligations related to securities lent or
     sold under repurchase agreements                    34,822       37,453
    Other liabilities                                    12,012       13,693
    ------------------------------------------------------------ ------------
                                                         89,254       92,621
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    Subordinated indebtedness (Note 6)                    6,067        5,157
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    Preferred share liabilities                             600          600
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    Non-controlling interests                               165          174
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    Shareholders' equity
    Preferred shares                                      3,156        3,156
    Common shares (Note 7)                                6,658        6,240
    Treasury shares                                           4            1
    Contributed surplus                                      96           92
    Retained earnings                                     5,972        5,156
    Accumulated other comprehensive income (AOCI)          (474)        (370)
    ------------------------------------------------------------ ------------
                                                         15,412       14,275
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
                                                     $  349,600   $  335,944
    ------------------------------------------------------------ ------------
    ------------------------------------------------------------ ------------
    The accompanying notes are an integral part of these interim consolidated
    financial statements.



                    CONSOLIDATED STATEMENT OF OPERATIONS
    -------------------------------------------------------------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    Unaudited, $ millions    Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Interest income
    Loans                   $  1,868  $  1,720  $1,765(1) $  5,349  $5,480(1)
    Securities borrowed or
     purchased under resale
     agreements                   49        32      36         111     293
    Securities                   381       353     366(1)    1,105   1,338(1)
    Deposits with banks           14        11       5          34      77
    ----------------------------------------------------- -------------------
                               2,312     2,116   2,172       6,599   7,188
    ----------------------------------------------------- -------------------
    Interest expense
    Deposits                     558       496     618       1,556   2,352
    Other liabilities            145        72     131         321     675
    Subordinated indebtedness     54        43      47         140     163
    Preferred share liabilities    7         8       7          23      23
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
                                 764       619     803       2,040   3,213
    ----------------------------------------------------- -------------------
    Net interest income        1,548     1,497   1,369       4,559   3,975
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Non-interest income
    Underwriting and
     advisory fees               108        87     132         339     346
    Deposit and payment fees     194       184     199         568     580
    Credit fees                   87        77      87         251     219
    Card fees                     72        83      80         242     260
    Investment management
     and custodial fees          117       117     103         344     307
    Mutual fund fees             188       185     166         556     483
    Insurance fees, net of
     claims                       72        66      69         205     195
    Commissions on securities
     transactions                108       120     122         349     348
    Trading revenue (loss)
     (Note 8)                     84       178     328         595    (832)
    AFS securities gains, net    123        65      25         281     233
    FVO (expense) revenue
     (Note 1)                   (146)      (88)     25        (439)    122
    Income from securitized
     assets                      150       120     113         421     369
    Foreign exchange other
     than trading                 88        65      73         231     433
    Other                         56       165     (34)        329       2
    ----------------------------------------------------- -------------------
                               1,301     1,424   1,488       4,272   3,065
    ----------------------------------------------------- -------------------
    Total revenue              2,849     2,921   2,857       8,831   7,040
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Provision for credit
     losses (Note 4)             221       316     547         896   1,225
    ----------------------------------------------------- -------------------
    Non-interest expenses
    Employee compensation
     and benefits (Note 10)      973       923     901       2,877   2,724
    Occupancy costs              161       163     151         475     440
    Computer, software and
     office equipment            246       241     263         729     759
    Communications                73        76      74         218     218
    Advertising and business
     development                  43        47      35         132     127
    Professional fees             53        48      53         144     135
    Business and capital taxes    22        24      29          66      89
    Other                        170       156     193         526     499
    ----------------------------------------------------- -------------------
                               1,741     1,678   1,699       5,167   4,991
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Income before income
     taxes and non-controlling
     interests                   887       927     611       2,768     824
    Income tax expense           244       261     172         791     279
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
                                 643       666     439       1,977     545
    Non-controlling interests      3         6       5          25      15
    ----------------------------------------------------- -------------------
    Net income              $    640  $    660  $  434    $  1,952  $  530
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Earnings per share
     (in dollars) (Note 11)
      - Basic               $   1.54  $   1.60  $ 1.02    $   4.72  $ 1.08
      - Diluted             $   1.53  $   1.59  $ 1.02    $   4.71  $ 1.08
    Dividends per common
     share (in dollars)     $   0.87  $   0.87  $ 0.87    $   2.61  $ 2.61
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (1) Amounts have been restated to conform to the presentation of the
        current period.

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



          CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
    -------------------------------------------------------------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    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  $  2,631
    Issue of preferred
     shares                        -         -         -         -       525
    ----------------------------------------------------- -------------------
    Balance at end of
     period                 $  3,156  $  3,156  $  3,156  $  3,156  $  3,156
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Common shares
    Balance at beginning
     of period              $  6,508  $  6,371  $  6,090  $  6,240  $  6,062
    Issue of common shares       150       137        71       418        99
    ----------------------------------------------------- -------------------
    Balance at end of
     period                 $  6,658  $  6,508  $  6,161  $  6,658  $  6,161
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Treasury shares
    Balance at beginning
     of period              $      1  $      1  $      1  $      1  $      1
    Purchases                   (598)   (2,987)   (2,340)   (4,438)   (6,354)
    Sales                        601     2,987     2,340     4,441     6,354
    ----------------------------------------------------- -------------------
    Balance at end of
     period                 $      4  $      1  $      1  $      4  $      1
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Contributed surplus
    Balance at beginning
     of period              $     94  $     94  $    104  $     92  $     96
    Stock option expense           2         3         3         8        10
    Stock options exercised        -        (1)       (1)       (2)       (1)
    Net (discount) premium
     on treasury shares            -        (1)       (1)       (1)        1
    Other                          -        (1)       (4)       (1)       (5)
    ----------------------------------------------------- -------------------
    Balance at end of
     period                 $     96  $     94  $    101  $     96  $    101
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Retained earnings
    Balance at beginning of
     period, as previously
     reported               $  5,713  $  5,432  $  4,826  $  5,156  $  5,483
    Adjustment for change
     in accounting policies        -         -         -         -     (6)(1)
    ----------------------------------------------------- -------------------
    Balance at beginning of
     period, as restated       5,713     5,432     4,826     5,156     5,477
    Net income                   640       660       434     1,952       530
    Dividends
      Preferred                  (42)      (43)      (44)     (127)     (119)
      Common                    (338)     (336)     (332)   (1,009)     (995)
    Other                         (1)        -         2         -        (7)
    ----------------------------------------------------- -------------------
    Balance at end of
     period                 $  5,972  $  5,713  $  4,886  $  5,972  $  4,886
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    AOCI, net of tax
    Balance at beginning
     of period              $   (662) $   (340) $   (360) $   (370) $   (442)
    Other comprehensive
     income (OCI)                188      (322)     (125)     (104)      (43)
    ----------------------------------------------------- -------------------
    Balance at end of
     period                 $   (474) $   (662) $   (485) $   (474) $   (485)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Retained earnings
     and AOCI               $  5,498  $  5,051  $  4,401  $  5,498  $  4,401
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Shareholders' equity
     at end of period       $ 15,412  $ 14,810  $ 13,820  $ 15,412  $ 13,820
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (1) Represents the impact of changing the measurement date for employee
        future benefits.

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



               CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    Unaudited, $ millions    Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Net income              $    640  $    660  $    434  $  1,952  $    530
    ----------------------------------------------------- -------------------
    OCI, net of tax
      Foreign currency
       translation adjustments
      Net gains (losses) on
       investment in self-
       sustaining foreign
       operations                 81      (257)     (513)     (233)     (378)
      Net (losses) gains on
       hedges of foreign
       currency translation
       adjustments               (33)       77       383        61       258
    ----------------------------------------------------- -------------------
                                  48      (180)     (130)     (172)     (120)
    ----------------------------------------------------- -------------------
      Net change in AFS
       securities
      Net unrealized gains
       (losses) on AFS
       securities                255      (158)       28       209       283
      Transfer of net gains
       to net income            (109)       (6)      (18)     (151)     (199)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
                                 146      (164)       10        58        84
    ----------------------------------------------------- -------------------
      Net change in cash flow
       hedges
      Net (losses) gains on
       derivatives designated
       as cash flow hedges        (9)        8        (8)      (11)      (13)
      Net losses on derivatives
       designated as cash flow
       hedges transferred to
       net income                  3        14         3        21         6
    ----------------------------------------------------- -------------------
                                  (6)       22        (5)       10        (7)
    ----------------------------------------------------- -------------------
    Total OCI               $    188  $   (322) $   (125) $   (104) $    (43)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Comprehensive income    $    828  $    338  $    309  $  1,848  $    487
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------



       INCOME TAX BENEFIT (EXPENSE) ALLOCATED TO EACH COMPONENT OF OCI
    -------------------------------------------------------------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    Unaudited, $ millions    Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Foreign currency
     translation adjustments
      Changes on investment
       in self-sustaining
       foreign operations   $     (5) $      3  $     34  $      -  $     37
      Changes on hedges of
       foreign currency
       translation
       adjustments                12       (18)     (119)      (10)      (17)
    Net change in AFS
     securities
      Net unrealized gains
       (losses) on AFS
       securities                (96)       64        41       (77)     (117)
      Transfer of net gains
       to net income              21         2         8        41        93
    Net change in cash flow
     hedges
      Changes on derivatives
       designated as cash
       flow hedges                 4        (4)        3         4         7
      Changes on derivatives
       designated as cash
       flow hedges
       transferred to net
       income                      -        (2)       (2)       (2)       (4)
    ----------------------------------------------------- -------------------
    Total income tax
     (expense) benefit
     allocated to OCI       $    (64) $     45  $    (35) $    (44) $     (1)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------

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



                    CONSOLIDATED STATEMENT OF CASH FLOWS
    -------------------------------------------------------------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    Unaudited, $ millions    Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Cash flows provided by
     (used in) operating
     activities
    Net income              $    640  $    660  $    434  $  1,952  $    530
    Adjustments to
     reconcile net income
     to cash flows provided
     by (used in) operating
     activities:
      Provision for credit
       losses                    221       316       547       896     1,225
      Amortization(1)             91        94        98       279       301
      Stock option expense         2         3        13         8        10
      Future income taxes        186       207        78       621      (150)
      AFS securities
       gains, net               (123)      (65)      (25)     (281)     (233)
      (Gains) losses on
       disposal of land,
       buildings and
       equipment                  (1)        2         1         1         3
      Other non-cash
       items, net                760       (21)      (36)      523      (175)
      Changes in operating
       assets and liabilities
        Accrued interest
         receivable               (7)       20       109        77       338
        Accrued interest
         payable                  49         5       (47)      (29)     (179)
        Amounts receivable
         on derivative
         contracts            (2,209)    1,670     5,594       547       534
        Amounts payable on
         derivative
         contracts             2,203    (1,351)   (6,251)     (540)   (1,968)
        Net change in
         trading securities   (2,999)      984      (914)   (5,728) 22,997(2)
        Net change in FVO
         securities              (22)    1,192     5,843     3,545    (1,648)
        Net change in other
         FVO assets and
         liabilities            (813)     (787)   (4,598)   (1,767)    2,748
        Current income taxes      73      (121)      705      (156)    2,291
        Other, net              (709)    1,536     2,084     1,040    (1,181)
    ----------------------------------------------------- -------------------
                              (2,658)    4,344     3,635       988    25,443
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Cash flows provided by
     (used in) financing
     activities
    Deposits, net of
     withdrawals              12,690     3,545    (2,542)   17,657   (18,997)
    Obligations related to
     securities sold short    (1,304)    2,364    (1,587)    2,292    (1,823)
    Net obligations related
     to securities lent or
     sold under repurchase
     agreements               (1,587)   (5,696)    6,326    (2,631)    2,992
    Issue of subordinated
     indebtedness                  -     1,100         -     1,100         -
    Redemption/repurchase
     of subordinated
     indebtedness                  -       (90)     (818)      (95)     (895)
    Issue of preferred
     shares                        -         -         -         -       525
    Issue of common shares,
     net                         150       137        71       418        99
    Net proceeds from
     treasury shares sold          3         -         -         3         -
    Dividends                   (380)     (379)     (376)   (1,136)   (1,114)
    Other, net                 1,232      (588)     (133)   (1,392)      571
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
                              10,804       393       941    16,216   (18,642)
    ----------------------------------------------------- -------------------
    Cash flows provided by
     (used in) investing
     activities
    Interest-bearing
     deposits with banks      (6,017)        -     1,190    (7,195)    2,358
    Loans, net of repayments  (5,488)   (7,494)   (8,567)  (21,624)   (5,693)
    Proceeds from
     securitizations           3,883     3,117     3,834     9,467    17,969
    Purchase of AFS
     securities              (18,531)  (10,144)  (20,515)  (46,144)  (72,089)
    Proceeds from sale of
     AFS securities            6,637    10,605     7,789    29,158    21,165
    Proceeds from maturity
     of AFS securities         4,520     6,137     9,918    19,157    25,449
    Net securities borrowed
     or purchased under
     resale agreements         7,382    (6,969)    1,645       667     4,567
    Net cash used in
     acquisitions                  -      (297)        -      (297)        -
    Purchase of land,
     buildings and equipment     (81)      (11)      (40)     (149)     (183)
    ----------------------------------------------------- -------------------
                              (7,695)   (5,056)   (4,746)  (16,960)   (6,457)
    ----------------------------------------------------- -------------------
    Effect of exchange rate
     changes on cash and
     non-interest-bearing
     deposits with banks           9       (35)      (46)      (33)      (50)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Net increase (decrease)
     in cash and non-
     interest-bearing
     deposits with banks
     during period               460      (354)     (216)      211       294
    Cash and non-interest-
     bearing deposits with
     banks at beginning
     of period                 1,563     1,917     2,068     1,812     1,558
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Cash and non-interest-
     bearing deposits with
     banks at end of
     period(3)              $  2,023  $  1,563  $  1,852  $  2,023  $  1,852
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Cash interest paid      $    715  $    614  $    850  $  2,069  $  3,392
    Cash income taxes
     (recovered) paid       $    (15) $    175  $   (610) $    327  $ (1,862)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (1) Includes amortization of buildings, furniture, equipment, leasehold
        improvements, software and other intangible assets.
    (2) Includes securities initially bought as trading securities and
        subsequently reclassified to loans and AFS securities.
    (3) Includes restricted cash balances of $255 million (April 30, 2010:
        $252 million, July 31, 2009: $285 million).

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



           NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)


    The unaudited interim consolidated financial statements of Canadian
    Imperial Bank of Commerce and its subsidiaries (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, 2009. 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, 2009, as set out on pages 96 to 167 of the 2009
    Annual Accountability Report.

    1.  Fair value of financial instruments

    Our approach for fair valuation of financial instruments is presented in
    Note 2 to the 2009 consolidated financial statements.

    Sensitivity of Level 3 financial assets and liabilities

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

    These positions are valued using inputs such as indicative broker
    quotations and internal models with estimated market inputs, which we
    consider to be non-observable. We have certain AFS securities and swap
    arrangements relating to the sale of securitized assets that are
    sensitive to prepayment rates and liquidity rates respectively, both of
    which we consider to be non-observable market inputs. In addition,
    certain asset-backed securities are sensitive to credit spreads which we
    consider to be a non-observable market input.

    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 structured credit exposures (U.S. residential mortgage
    market (USRMM) and non-USRMM) are sensitive to changes in mark-to-market
    (MTM), generally as derived from indicative broker quotes or internal
    models as described above. A 10% adverse change in MTM of the underlyings
    would result in losses of approximately $48 million in our unhedged USRMM
    portfolio and $111 million in our non-USRMM portfolio, excluding unhedged
    non-USRMM positions classified as loans which are carried at amortized
    cost, and before the impact of our transaction with Cerberus Capital
    Management LP (Cerberus). The fair value of the Cerberus protection
    against USRMM positions is expected to reasonably offset any changes in
    the fair value of USRMM positions.

    For our hedged positions there are two categories of sensitivities, the
    first of which relates to our hedged loan portfolio and the second of
    which 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 $41 million, assuming current credit valuation
    adjustments (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 $11 million, assuming current CVA
    ratios remain unchanged. There is no impact from the Cerberus protection
    because none of the underlying USRMM collateralized debt obligations
    (CDO) exposures are now hedged by financial guarantors.

    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 result in a net gain of approximately $21 million,
    assuming current CVA ratios remain unchanged.

    The impact of a 10% reduction in receivable net of CVA from financial
    guarantors would result in a net loss of approximately $108 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 $26 million.

    A 20 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 $94 million.

    A 10% reduction in the MTM of our asset-backed securities that are valued
    using non-observable credit and liquidity spreads would result in a
    decrease in OCI of approximately $213 million.

    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 consolidated balance sheet are categorized:

    -------------------------------------------------------------------------
                                           Level 1      Level 2      Level 3
                                       ------------ ------------ ------------
                                                                   Valuation
                                                      Valuation  technique -
                                                    technique -         non-
                                            Quoted   observable   observable
                                            market       market       market
    $ millions, as at July 31, 2010          price       inputs       inputs
    -------------------------------------------------------------------------
    Assets
    Trading securities
      Government issued and guaranteed
       securities                       $    3,022   $    6,101   $        -
      Corporate equity                       8,086          894            -
      Corporate debt                             -        1,123           20
      Mortgage- and asset-backed
       securities                                -           94        1,498
    -------------------------------------------------------------------------
                                        $   11,108   $    8,212   $    1,518
    AFS securities
      Government issued and guaranteed
       securities                       $   12,148   $   14,624   $        -
      Corporate debt                             -        4,115           27
      Mortgage- and asset-backed
       securities                                -        3,123        3,212
      Corporate public equity                  103            -            -
    -------------------------------------------------------------------------
                                        $   12,251   $   21,862   $    3,239
    FVO securities and loans                    10       18,757           39
    Derivative instruments                     265       21,802        1,819
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total assets                        $   23,634   $   70,633   $    6,615
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Apr. 30, 2010                       $   19,506   $   62,046   $    6,646
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jan. 31, 2010                       $   19,856   $   72,493   $    6,681
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009                       $   42,057   $   54,298   $    5,320
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities
    Obligations related to securities
     sold short                         $    2,585   $    6,239   $        -
    FVO deposits                                 -        1,066          925
    Derivative instruments                     283       22,171        3,833
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total liabilities                   $    2,868   $   29,476   $    4,758
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Apr. 30, 2010                       $    5,844   $   26,435   $    4,916
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jan. 31, 2010                       $    3,865   $   27,747   $    5,521
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009                       $    5,444   $   26,299   $    5,820
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    During the second quarter, we transferred $266 million of asset-backed
    AFS securities from Level 2 to Level 3 due to a lack of observable inputs
    and transferred $138 million of certain trading government securities
    from Level 3 to Level 2 due to availability of market observable inputs.

    During the first quarter, we reclassified certain government issued and
    guaranteed securities from Level 1 to Level 2 to reflect our use of
    valuation techniques with observable market inputs. As a result of the
    reclassification, the fair values of these securities as at January 31,
    2010, included in Level 2 that would have been included in Level 1 as at
    October 31, 2009 in the table above, were $4,710 million of trading
    securities, $12,607 million of AFS securities, $757 million of FVO
    securities and $2,416 million of obligations related to securities sold
    short.

    Certain corporate debt securities were also reclassified during the first
    quarter from Level 1 to Level 2 as active market quotes were not
    available. As a result of the reclassification, the fair values of these
    securities, as at January 31, 2010, included in Level 2 that would
    previously have been included in Level 1 in the table above, were
    $107 million of trading securities and $3,440 million of AFS securities.

    In addition, certain asset-backed AFS securities of $1,269 million that
    would previously have been included in Level 2, were reclassified to
    Level 3 during the first quarter, due to a lack of observable market
    inputs.

    The net losses recognized in the consolidated statement of operations on
    the financial instruments, for which fair value was estimated using a
    valuation technique requiring non-observable market inputs, for the
    quarter and nine months ended July 31, 2010 were $561 million and
    $177 million, respectively (a net gain of $607 million and a net loss of
    $69 million for the quarter and nine months ended July 31, 2009,
    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.


    $ millions, as at or for the three months ended
    -------------------------------------------------------------------------
                                          Net realized/unrealized
                                       gains/(losses) included in
                                   -------------------------------
                                                   Net              Transfer
                                    Opening     income/                in to
    July 31, 2010                   balance   (loss)(1)       OCI  Level 3(2)
    -------------------------------------------------------------------------
    Financial assets
    Trading securities             $  1,376   $    129   $      -   $      -
    AFS securities                    3,046          2         58          -
    FVO securities and loans             60          1          -          -
    -------------------------------------------------------------------------
    Total assets                   $  4,482   $    132   $     58   $      -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Apr. 30, 2010                  $  4,321   $    112   $    (22)  $    266
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jan. 31, 2010                  $  2,867   $    262   $     20   $  1,269
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial liabilities
    FVO deposits                   $    887   $   (127)  $      -   $      -
    Derivative instruments (net)      1,865       (566)         -          -
    -------------------------------------------------------------------------
    Total liabilities              $  2,752   $   (693)  $      -   $      -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Apr. 30, 2010                  $  3,161   $    266   $      -   $     62
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jan. 31, 2010                  $  3,367   $   (256)  $      -   $      -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                   Net
                                             purchases,
                                                 sales,
                                             issuances            Unrealized
                                   Transfer        and                 gains/
                                     out of     settle-   Closing    (losses)
    July 31, 2010                   Level 3      ments    balance         (3)
    -------------------------------------------------------------------------
    Financial assets
    Trading securities             $      -   $     13   $  1,518   $     91
    AFS securities                        -        133      3,239          -
    FVO securities and loans              -        (22)        39          -
    -------------------------------------------------------------------------
    Total assets                   $      -   $    124   $  4,796   $     91
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Apr. 30, 2010                  $   (150)  $    (45)  $  4,482   $    138
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jan. 31, 2010                  $      -   $    (97)  $  4,321   $    230
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financial liabilities
    FVO deposits                   $      -   $    (89)  $    925   $   (105)
    Derivative instruments (net)          -       (417)     2,014       (495)
    -------------------------------------------------------------------------
    Total liabilities              $      -   $   (506)  $  2,939   $   (600)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Apr. 30, 2010                  $     (4)  $   (201)  $  2,752   $    330
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jan. 31, 2010                  $      -   $   (462)  $  3,161   $     (9)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes foreign currency gains and losses.
    (2) Includes AFS securities that were transferred from Level 2 to Level 3
        during the respective quarters, as noted above.
    (3) Changes in unrealized gains/(losses) included in net income or OCI
        for instruments held at the end of quarters presented above.

    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 $18,806 million and $1,991 million, respectively as at
    July 31, 2010 ($22,532 million and $4,485 million, respectively as at
    October 31, 2009).

    The impact on the 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 nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    $ millions               Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Impact of FVO
     designated instruments
     and related hedges
      Net interest income   $     65  $     68  $     66  $    201  $    185
      Non-interest (loss)
       income                   (146)      (88)       25      (439)      122
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
      Net (loss) income     $    (81) $    (20) $     91  $   (238) $    307
    ----------------------------------------------------- -------------------
    Gain (loss) from changes
     in credit spreads
      FVO designated loans  $     (1) $      8  $     26  $      1  $    (42)
      FVO designated loans,
       net of related hedges      (1)        8        14         1        (2)
      FVO designated
       liabilities                (1)       (1)       (4)        -        (7)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------

    2.  Significant disposition and acquisitions

    Sale of CIBC Mellon Trust Company's Issuer Services Business

    On July 28, 2010, CIBC Mellon Trust Company (CMT), a 50/50 joint venture
    between CIBC and The Bank of New York Mellon, announced it has signed an
    agreement to sell its Issuer Services business (stock transfer and
    employee share purchase plan). The transaction is expected to close later
    this year. CMT's Issuer Services business results are reported in CIBC's
    Corporate and Other reporting segment and the results of its operations
    are not considered significant to CIBC's consolidated results.

    Acquisition of Citi Cards Canada Inc.'s Canadian MasterCard portfolio

    On June 14, 2010, we announced that we had reached a definitive agreement
    to acquire Citi Cards Canada Inc.'s rights and obligations in respect of
    their Canadian MasterCard directly owned and securitized credit card
    receivables, to Broadway Trust (the Trust), and related assets estimated
    at $2.1 billion, for cash consideration of approximately $1.0 billion,
    subject to post closing adjustments. Approximately $0.8 billion of credit
    card receivables are directly owned. The Trust consists of approximately
    $1.3 billion of sold receivables, $1.1 billion funded externally by
    senior notes and $0.2 billion funded by subordinated notes which we will
    purchase. The acquired assets will be part of our CIBC Retail Markets
    reporting segment. The acquisition is expected to close in the quarter
    ending October 31, 2010.

    Acquisition of CIT Business Credit Canada Inc.

    On April 30, 2010, we obtained 100% control of CIT Business Credit Canada
    Inc. (CITBCC) through the acquisition of CIT Financial Ltd.'s (CIT) 50%
    common equity interest in CITBCC and CIT's share of the outstanding
    shareholder advances made to CITBCC under a Master Funding Agreement. The
    cash consideration was $306 million. Additional cash consideration of up
    to $8 million may be payable to CIT depending on certain circumstances.
    The transaction has been accounted for using the purchase method and as
    a result, we fully consolidated CITBCC commencing April 30, 2010. Prior
    to that date, we accounted for our 50% interest using the proportionate
    consolidation method of accounting.

    CITBCC's results continue to be reported within CIBC Retail Markets
    strategic business line. Subsequent to the acquisition, CITBCC has been
    renamed CIBC Asset-Based Lending Inc.

    Investment in The Bank of N.T. Butterfield & Son Limited

    We invested $155 million (US$150 million) for a direct 22.5% common
    equity interest in The Bank of N.T. Butterfield & Son Limited
    (Butterfield) on March 2, 2010. Pursuant to a rights offering, which
    closed on May 11, 2010, our direct investment decreased to $130 million
    (US$125 million) or 18.8%. We also invested $23 million (US$22 million)
    or 3.3% on March 2, 2010 indirectly through a private equity fund, which
    was reduced to $19 million (US$18 million) or 2.7% as a result of the
    rights offering. Our total ownership in Butterfield may decrease in the
    future under certain circumstances.

    Our direct equity investment is accounted for using the equity method of
    accounting.

    In addition, we have provided Butterfield with a commitment letter for a
    senior secured credit facility for up to $308 million (US$300 million)
    that was reduced from the original commitment letter of $508 million
    (US$500 million) during the quarter, at Butterfield's request.

    3.  Securities

    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. In the current quarter, we have not reclassified any securities.

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

    -------------------------------------------------------------------------
                                        2010                            2009
    $ millions, as at                Jul. 31                         Oct. 31
    ----------------------------------------- -------------------------------
                                Reclassified
                                     in 2009    Reclassified    Reclassified
                                    and 2008         in 2009         in 2008
                              --------------- --------------- ---------------
                                       Carry-          Carry-          Carry-
                                Fair     ing    Fair     ing    Fair     ing
                               value   value   value   value   value   value
                              --------------- -------------------------------
    Trading assets previously
     reclassified to HTM
     (currently in loans)     $5,470  $5,676  $    -  $    -  $5,843  $6,202
    Trading assets previously
     reclassified to AFS         223     223      84      84     786     786
    -------------------------------------------------------------------------
    Total financial assets
     reclassified             $5,693  $5,899  $   84  $   84  $6,629  $6,988
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    ----------------------------------------------------- -------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    $ millions               Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Income (loss) recognized
     on securities
     reclassified
    Gross income recognized
     in income statement    $     38  $     41  $     50  $    120  $    245
    Impairment write-downs         -         -       (23)        -       (78)
    Funding related interest
     expenses                    (16)      (17)      (40)      (58)     (120)
    ----------------------------------------------------- -------------------
    Net income (loss)
     recognized, before
     taxes                  $     22  $     24  $    (13) $     62  $     47
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Impact if
     reclassification
     had not been made
    On trading assets
     previously
     reclassified to HTM
     (currently in loans)   $     42  $    (70) $   (512) $   (153) $   (113)
    On trading assets
     previously
     reclassified to AFS          (7)        3        (3)       (5)      (14)
    ----------------------------------------------------- -------------------
    Decrease (increase) in
     income, before taxes   $     35  $    (67) $   (515) $   (158) $   (127)
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------

    4.  Loans

    Allowance for credit losses
    -------------------------------------------------------------------------
                                                            As at or for the
                                                          three months ended
                           --------------------------------------------------
                                                    2010      2010      2009
                                                 Jul. 31   Apr. 30   Jul. 31
                           --------------------------------------------------
                            Specific   General     Total     Total     Total
    $ millions             allowance allowance allowance allowance allowance
    -------------------------------------------------------------------------
    Balance at beginning
     of period              $    778  $  1,292  $  2,070  $  2,039  $  1,768
    Provision for credit
     losses                      297       (76)      221       316       547
    Write-offs                  (295)        -      (295)     (301)     (336)
    Recoveries                    31         -        31        32        29
    Transfer from general
     to specific(1)                1        (1)        -         -         -
    Other                          5         5        10       (16)      (28)
    -------------------------------------------------------------------------
    Balance at end
     of period              $    817  $  1,220  $  2,037  $  2,070  $  1,980
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Comprises:
      Loans                 $    817  $  1,156  $  1,973  $  2,002  $  1,899
      Undrawn credit
       facilities                  -        64        64        68        80
      Letters of credit            -         -         -         -         1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------
                              As at or for the
                             nine months ended
                           --------------------
                                2010      2009
                             Jul. 31   Jul. 31
                           --------------------
                               Total     Total
    $ millions             allowance allowance
    -------------------------------------------
    Balance at beginning
     of period              $  2,043  $  1,523
    Provision for credit
     losses                      896     1,225
    Write-offs                  (984)     (833)
    Recoveries                    95        95
    Transfer from general
     to specific(1)                -         -
    Other                        (13)      (30)
    -------------------------------------------
    Balance at end
     of period              $  2,037  $  1,980
    -------------------------------------------
    -------------------------------------------
    Comprises:
      Loans                 $  1,973  $  1,899
      Undrawn credit
       facilities                 64        80
      Letters of credit            -         1
    -------------------------------------------
    -------------------------------------------
    (1) Related to student loan portfolio.


    Impaired loans
    -------------------------------------------------------------------------
                                             2010                       2009
    $ millions, as at                     Jul. 31                    Oct. 31
    -------------------------------------------------------------------------
                                 Specific                   Specific
                          Gross    allow-     Net    Gross    allow-     Net
                         amount     ance    total   amount     ance    total
    -------------------------------------------------------------------------
    Residential
     mortgages          $   472  $    40  $   432  $   402  $    35  $   367
    Personal                320      236       84      325      258       67
    Business and
     government           1,250      541      709    1,184      442      742
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total impaired
     loans(1)           $ 2,042  $   817  $ 1,225  $ 1,911  $   735  $ 1,176
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Average balance of gross impaired loans for the nine months ended
        July 31, 2010 totalled $1,891 million (year ended October 31, 2009:
        $1,345 million).


    5.  Securitizations and variable interest entities

    Securitizations

    Residential mortgages

    We securitize insured fixed and variable-rate residential mortgages
    through the creation of mortgage-backed securities (MBS) under the Canada
    Mortgage Bond program, sponsored by the Canada Mortgage and Housing
    Corporation (CMHC), and the Government of Canada National Housing Act
    (NHA) MBS Auction process. Under both programs, the MBS are sold to a
    trust that issues securities to investors. We act as counterparty in
    interest rate swap agreements where we pay the trust the interest due to
    investors and receive the interest on the MBS. As at July 31, 2010, we
    had $950 million (October 31, 2009: $1,024 million) of interest-only
    strips relating to the securitized assets and another $28 million
    (October 31, 2009: $38 million) in interest-only strips relating to other
    CMHC MBS programs. Credit losses are not expected as the mortgages are
    insured.

    We also securitize Canadian insured prime mortgages and uninsured Near-
    Prime/Alt-A mortgages to a qualifying specific purpose entity (QSPE). As
    at July 31, 2010, we had $90 million (October 31, 2009: $91 million) of
    interest-only strips relating to the securitized assets; we also held
    $55 million (October 31, 2009: $408 million) notes issued by the QSPE of
    which $11 million (October 31, 2009: $372 million) were R1 high notes and
    $44 million (October 31, 2009: $36 million) were R1 mid notes. A
    liquidity facility of $956 million ($901 million net of our investments
    in the QSPE) (October 31, 2009: $851 million ($443 million net of our
    investments in the QSPE)) was provided to the QSPE which was not drawn as
    at July 31, 2010. In addition, we had $43 million (October 31, 2009:
    $25 million) of first recourse protection. We are also the counterparty
    to interest rate swap agreements where we pay the QSPE the interest due
    to investors and receive a rate of interest derived off the coupon of the
    underlying mortgages. Total assets in the QSPE as at July 31, 2010 were
    $956 million (October 31, 2009: $851 million), which includes
    $371 million (October 31, 2009: $414 million) of Prime mortgages and
    $569 million (October 31, 2009: $431 million) of Near-Prime/Alt-A
    mortgages. We held another $66 million (October 31, 2009: $116 million)
    in inventory that is available for securitization. The Near-Prime/Alt-A
    mortgages have an average loss rate over the past five years of 34 basis
    points and an average loan-to-value ratio of 74%.

    Upon sale of these assets, a net gain or loss is recognized in income
    from securitized assets. We retain responsibility for servicing the
    mortgages and recognize revenue as these services are provided.

    Commercial mortgages

    We securitize commercial mortgages through a pass-through QSPE structure
    that results in ownership certificates held by various investors. As at
    July 31, 2010, we held ownership certificates of $10 million (October 31,
    2009: $26 million). We continue to service the mortgages. There were no
    commercial mortgage securitizations during the quarter.

    Cards

    We securitize credit card receivables to Cards II Trust, a QSPE
    established to purchase co-ownership interests in the receivables. We
    maintain the credit card client servicing responsibilities for the
    securitized receivables and recognize revenue as services are provided.

    As at July 31, 2010, our investments in the QSPE included interest-only
    strips of $11 million (October 31, 2009: $11 million), subordinated and
    enhancement notes of $328 million (October 31, 2009: $268 million), and
    senior notes of $98 million (October 31, 2009: $96 million).

    The following table summarizes our residential mortgages and cards
    related securitization and sales activity:

    -------------------------------------------------------------------------
                                                  For the three months ended
                           --------------------------------------------------
                                         2010       2010                2009
                                      Jul. 31    Apr. 30             Jul. 31
                           ------------------- ---------- -------------------
                             Residen-            Residen-   Residen-
                                tial                tial       tial
    $ millions             mortgages    Cards  mortgages  mortgages    Cards
    -------------------------------------------------------------------------
    Securitized(1)         $   6,285  $ 1,152  $   2,353  $     114  $    54
    Sold(1)(2)                 3,846    1,152      3,120      3,786       54
    Net cash proceeds          3,883    1,152      3,117      3,780       54
    Retained interests           127        -        126        169        -
    Gain (loss) on sale,
     net of transaction
     costs                        67        3         57         40       (1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Retained interest
     assumptions (%)
    Weighted-average
     remaining life
     (in years)                  3.0      0.2        3.5        3.6      0.2
    Prepayment/payment
     rate                  15.0-18.0     37.2  15.0-18.0  12.0-17.0     37.9
    Discount rate            2.5-8.7      3.4    1.6-9.3    1.5-8.8      2.8
    Expected credit losses   0.0-0.4      6.1    0.0-0.4    0.0-0.2      6.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    --------------------------------------------------------------
                                        For the nine months ended
                           ---------------------------------------
                                         2010                2009
                                      Jul. 31             Jul. 31
                           ------------------- -------------------
                             Residen-            Residen-
                                tial                tial
    $ millions             mortgages    Cards  mortgages    Cards
    --------------------------------------------------------------
    Securitized(1)         $   9,989  $ 1,152  $  22,383  $    54
    Sold(1)(2)                 9,410    1,152     17,954       54
    Net cash proceeds          9,467    1,152     17,915       54
    Retained interests           371        -        905        -
    Gain (loss) on sale,
     net of transaction
     costs                       182        3         81       (1)
    --------------------------------------------------------------
    --------------------------------------------------------------
    Retained interest
     assumptions (%)
    Weighted-average
     remaining life
     (in years)                  3.2      0.2        3.5      0.2
    Prepayment/payment
     rate                  15.0-18.0     37.2  12.0-24.0     37.9
    Discount rate            1.6-9.3      3.4    1.4-8.8      2.8
    Expected credit losses   0.0-0.4      6.1    0.0-0.2      6.9
    --------------------------------------------------------------
    --------------------------------------------------------------
    (1) Includes $101 million (April 30, 2010: $68 million; July 31, 2009:
        $62 million) of uninsured fixed-rate mortgages securitized to a QSPE.
    (2) Assets securitized and not sold are reported as FVO securities on the
        consolidated balance sheet and are stated at fair value.

    Variable interest entities (VIEs)

    VIEs that are consolidated

    As discussed in Note 6 to our 2009 consolidated financial statements, we
    are considered the primary beneficiary of certain VIEs. $895 million of
    total assets and liabilities were consolidated as at July 31, 2010
    (October 31, 2009: $1,125 million).

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

    -------------------------------------------------------------------------
                                                           2010         2009
    $ millions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Trading securities                               $      737   $      669
    AFS securities                                           90           91
    Residential mortgages                                    66          115
    Other assets                                              2          250
    -------------------------------------------------------------------------
    Total assets                                     $      895   $    1,125
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    VIEs that are not consolidated

    Also as discussed in Note 6 to our 2009 consolidated financial
    statements, we have interests in VIEs involved in the securitization of
    third-party assets, for which we are not considered the primary
    beneficiary and thus do not consolidate. These VIEs include several CIBC-
    sponsored conduits and CDOs for which we acted as structuring and
    placement agents.

    We are not considered the primary beneficiary of CIBC Capital Trust, a
    trust wholly owned by CIBC. For additional details, see Note 18 to our
    2009 consolidated financial statements.

    We also have interests in securities issued by entities established by
    CMHC, Federal National Mortgage Association (Fannie Mae), Federal Home
    Loan Mortgage Corporation (Freddie Mac), Government National Mortgage
    Association (Ginnie Mae), Federal Home Loan Bank, Federal Farm Credit
    Bank, and Student Loan Marketing Association (Sallie Mae).

    CIBC-sponsored conduits
    -----------------------
    We sponsor several non-consolidated conduits in Canada that purchase
    pools of financial assets from our clients and finance the purchases by
    issuing commercial paper to investors. Total assets of these non-
    consolidated conduits amounted to $3.0 billion as at July 31, 2010
    (October 31, 2009: $4.1 billion). Certain of our conduits hold commercial
    paper issued by our other conduits. These holdings are included in the
    total assets. The underlying collateral amounts totalled $2.4 billion as
    at July 31, 2010 (October 31, 2009: $3.6 billion). We continue to support
    our sponsored conduits from time to time through the purchase of
    commercial paper issued by these conduits.

    CIBC structured CDO vehicles
    ----------------------------
    We have curtailed our business activity in structuring CDO vehicles
    within our structured credit run-off portfolio. Our exposures to CDO
    vehicles mainly arose through our previous involvement in acting as
    structuring and placement agent for the CDO vehicles.

    Third-party structured vehicles - run-off
    -----------------------------------------
    Similar to our structured CDO activities, we also curtailed our business
    activities in third-party structured vehicles, within our structured
    credit run-off portfolio. These positions were initially traded as
    intermediation, correlation and flow trading which earned us a spread on
    matching positions.

    Third-party structured vehicles - continuing
    --------------------------------------------
    We have investments in third-party structured vehicles through our
    Treasury and trading activities.

    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.

    -------------------------------------------------------------------------
                                                        Third-party
                                          CIBC- structured vehicles
                               CIBC- structured -------------------
    $ millions, as at      sponsored       CDO             Continu-
     July 31, 2010          conduits  vehicles   Run-off       ing     Total
    -------------------------------------------------------------------------
    On balance sheet
     assets(1)
    Trading securities      $     32  $      -  $    604  $     21  $    657
    AFS securities                 -         5        14     1,983     2,002
    FVO                            -        28         -       214       242
    Loans                         72       426     7,123         -     7,621
    Derivatives(2)                 -         -         -        59        59
    -------------------------------------------------------------------------
    Total assets            $    104  $    459  $  7,741  $  2,277  $ 10,581
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009           $    556  $    737  $  6,676  $  1,695  $  9,664
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    On balance sheet
     liabilities
    Derivatives(2)          $      -  $     80  $  1,164  $     38  $  1,282
    -------------------------------------------------------------------------
    Total liabilities       $      -  $     80  $  1,164  $     38  $  1,282
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009           $      -  $    243  $2,213(3) $      -  $  2,456
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Maximum exposure to loss
    Maximum exposure to loss before hedge positions                 $ 18,096
    Less: notional of protection purchased on hedges
     relating to written credit derivatives, less gross
     receivable on those hedges                                       (3,940)
    Less: carrying value of hedged securities and loans               (7,548)
    -------------------------------------------------------------------------
    Maximum exposure to loss net of hedges                          $  6,608
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Oct. 31, 2009(3)                                                $  4,718
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Excludes securities issued by, retained interest in, and derivatives
        with entities established by CMHC, Fannie Mae, Freddie Mac, Ginnie
        Mae, Federal Home Loan Banks, Federal Farm Credit Bank, and Sallie
        Mae.
    (2) Comprises credit derivatives (written options and total return swaps)
        under which we assume exposures and excludes all other derivatives.
    (3) Restated to exclude balances in and exposures to consolidated VIEs.

    6.  Subordinated indebtedness

    On July 26, 2010, we announced our intention to redeem all $1,300 million
    of our 3.75% Debentures (subordinated indebtedness) due September 9,
    2015. In accordance with their terms, the debentures will be redeemed at
    100% of their principal amount, plus accrued and unpaid interest, on
    September 9, 2010.

    On April 30, 2010, we issued $1,100 million principal amount of 4.11%
    Debentures (subordinated indebtedness) due April 30, 2020. The debentures
    qualify as Tier 2 regulatory capital.

    7.  Share capital

    Common shares

    During the quarter, we issued 0.2 million (April 30, 2010: 0.4 million;
    January 31, 2010: 1.1 million) new common shares for a total
    consideration of $12 million (April 30, 2010: $21 million; January 31,
    2010: $43 million), pursuant to stock option plans. We issued
    1.8 million (April 30, 2010: 1.4 million; January 31, 2010: 1.4 million)
    new common shares for a total consideration of $116 million (April 30,
    2010: $101 million; January 31, 2010: $88 million), pursuant to the
    Shareholder Investment Plan. We also issued 0.3 million (April 30, 2010:
    0.2 million; January 31, 2010: nil) new shares for a total consideration
    of $22 million (April 30, 2010: $15 million; January 31, 2010: nil),
    pursuant to the Employee Share Purchase Plan.

    Regulatory capital and ratios

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

    -------------------------------------------------------------------------
                                                           2010         2009
    $ millions, as at                                   Jul. 31      Oct. 31
    -------------------------------------------------------------------------
    Tier 1 capital                                   $   15,179   $   14,154
    Total regulatory capital                             19,358       18,827
    Risk-weighted assets                                107,176      117,298
    Tier 1 capital ratio                                   14.2%        12.1%
    Total capital ratio                                    18.1%        16.1%
    Assets-to-capital multiple                            16.6x        16.3x
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    8.  Financial guarantors

    We have derivative contracts with financial guarantors to hedge our
    exposure on various reference assets, including collateralized debt
    obligations and other positions related to the USRMM. During the quarter
    and nine months ended July 31, 2010, we recorded a net loss of
    $116 million and net recovery of $602 million, respectively ($148 million
    and $1.4 billion net losses for the quarter and nine months ended
    July 31, 2009, respectively) on the hedging contracts provided by
    financial guarantors in trading revenue. Separately, we recorded a net
    recovery of $51 million and net loss of $110 million, on termination of
    contracts with financial guarantors, during the quarter and nine months
    ended July 31, 2010, respectively (net recovery of $163 for the quarter
    and nine months ended July 31, 2009).

    The related valuation adjustments were $713 million as at July 31, 2010
    (October 31, 2009: $2.2 billion). The fair value of derivative contracts
    with financial guarantors, net of valuation adjustments, was $1.1 billion
    as at July 31, 2010 (October 31, 2009: $1.5 billion).

    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.

    9.  Income taxes

    Future income tax asset

    As at July 31, 2010, our future income tax asset was $945 million
    (October 31, 2009: $1,635 million), net of a $90 million valuation
    allowance (October 31, 2009: $95 million). Included in the future income
    tax asset are $365 million as at July 31, 2010 (October 31, 2009:
    $990 million) related to Canadian non-capital loss carryforwards that
    expire in 19 years, $54 million as at July 31, 2010 (October 31, 2009:
    $68 million) related to Canadian capital loss carryforwards that have no
    expiry date, and $309 million as at July 31, 2010 (October 31, 2009:
    $356 million) 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 the valuation allowance,
    will be realized.

    Enron

    On October 2, 2009 and March 17, 2010, the Canada Revenue Agency (CRA)
    issued reassessments disallowing the deduction of approximately
    $3.0 billion of the 2005 Enron settlement payments and related legal
    expenses. In the current quarter, CRA also proposed to disallow legal
    expenses related to 2006. On April 30, 2010, we filed Notices of Appeal
    with the Tax Court of Canada. 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 thereon of
    approximately $165 million. Should we fail to defend our position in its
    entirety, additional tax expense of approximately $865 million and non-
    deductible interest thereon of $129 million would be incurred.

    10. Employee future benefit expenses

    ----------------------------------------------------- -------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
                                2010      2010      2009      2010      2009
    $ millions               Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Defined benefit plans
      Pension benefit plans $     44  $     44  $     18  $    132  $     58
      Other benefit plans         10         9         8        29        27
    ----------------------------------------------------- -------------------
    Total defined benefit
     expense                $     54  $     53  $     26  $    161  $     85
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Defined contribution
     plans
      CIBC's pension plans  $      2  $      3  $      3  $      8  $      9
      Government pension
       plans(1)                   18        19        18        55        56
    ----------------------------------------------------- -------------------
    Total defined
     contribution expense   $     20  $     22  $     21  $     63  $     65
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (1) Includes Canada Pension Plan, Quebec Pension Plan, and U.S. Federal
        Insurance Contributions Act.

    11. Earnings per share (EPS)

    ----------------------------------------------------- -------------------
                                                                For the nine
                              For the three months ended        months ended
                            ----------------------------- -------------------
    $ millions, except          2010      2010      2009      2010      2009
     per share amounts       Jul. 31   Apr. 30   Jul. 31   Jul. 31   Jul. 31
    ----------------------------------------------------- -------------------
    Basic EPS
    Net income              $    640  $    660  $    434  $  1,952  $    530
    Preferred share
     dividends and premiums      (42)      (43)      (44)     (127)     (119)
    ----------------------------------------------------- -------------------
    Net income applicable
     to common shares       $    598  $    617  $    390  $  1,825  $    411
    ----------------------------------------------------- -------------------
    Weighted-average common
     shares outstanding
     (thousands)             388,815   386,865   381,584   386,706   381,300
    ----------------------------------------------------- -------------------
    Basic EPS               $   1.54  $   1.60  $   1.02  $   4.72  $   1.08
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    Diluted EPS
    Net income applicable
     to common shares       $    598  $    617  $    390  $  1,825  $    411
    ----------------------------------------------------- -------------------
    Weighted-average common
     shares outstanding
     (thousands)             388,815   386,865   381,584   386,706   381,300
    Add: stock options
     potentially
     exercisable(1)
     (thousands)                 857     1,000       972     1,004       621
    ----------------------------------------------------- -------------------
    Weighted-average diluted
     common shares
     outstanding(2)
     (thousands)             389,672   387,865   382,556   387,710   381,921
    ----------------------------------------------------- -------------------
    Diluted EPS             $   1.53  $   1.59  $   1.02  $   4.71  $   1.08
    ----------------------------------------------------- -------------------
    ----------------------------------------------------- -------------------
    (1) Excludes average options outstanding of 2,603,128 with a weighted-
        average exercise price of $76.96; average options outstanding of
        1,635,786 with a weighted-average exercise price of $80.85; and
        average options outstanding of 2,269,430 with a weighted-average
        exercise price of $77.88 for the three months ended July 31, 2010,
        April 30, 2010, and July 31, 2009, 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 either we have settled
        preferred shares for cash in the past or we have not exercised our
        conversion right in the past.

    12. Guarantees

    -------------------------------------------------------------------------
                                                2010                    2009
    $ millions, as at                        Jul. 31                 Oct. 31
    -------------------------------------------------------------------------
                                 Maximum                 Maximum
                               potential               potential
                                  future    Carrying      future    Carrying
                               payment(1)     amount   payment(1)     amount
    -------------------------------------------------------------------------
    Securities lending with
     indemnification(2)        $  44,400   $       -   $  30,797   $       -
    Standby and performance
     letters of credit             5,676          23       5,123          20
    Credit derivatives
      Written options             13,140       2,862      20,547       4,226
      Swap contracts written
       protection                  2,944         170       3,657         276
    Other derivative written
     options                           -(3)    2,001           -(3)    2,849
    Other indemnification
     agreements                        -(3)        -           -(3)        -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The total collateral available relating to these guarantees was
        $47.3 billion (October 31, 2009: $33.1 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 153 of the 2009 consolidated financial
        statements for further information.

    13. 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.

    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 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. While the Lehman estate expressed its
    disagreement with the actions of the indenture trustee, the estate has
    not instituted any legal proceeding with regard to the CDO or our VFN.
    The Lehman estate has, however, instituted legal proceedings involving a
    number of other CDOs, and in the first quarter of 2010, in Lehman
    Brothers Special Financing, Inc. v. BNY Corporate Trustee Services, Ltd.,
    the U.S. bankruptcy court in New York ruled unenforceable a customary
    provision in a CDO transaction that reversed the priority of the payment
    waterfall upon the bankruptcy of Lehman, the credit support provider
    under a related swap agreement. That ruling, which the defendant has
    sought leave to appeal, does not change our belief that if contested, the
    trustee's actions in reducing the unfunded commitment on our VFN to zero
    should be upheld although there can be no certainty regarding any
    eventual outcome. We continue to believe that the CDO indenture trustee's
    actions were fully supported by the terms of the governing contracts and
    the relevant legal standards.

    14. Segmented information

    CIBC has two strategic business lines: CIBC Retail Markets and Wholesale
    Banking. These business lines are supported by five functional groups -
    Technology and Operations; Corporate Development; Finance (including
    Treasury); Administration; and Risk Management. The activities of these
    functional groups are included within Corporate and Other, with their
    revenue, expenses and balance sheet resources generally being allocated
    to the business lines.

    During the first quarter, the global repurchase agreement (repo) business
    that was previously part of Treasury in Corporate and Other was
    retroactively transferred to capital markets within Wholesale Banking.
    The results of the repo business were previously allocated substantially
    to other within CIBC Retail Markets. Also during the first quarter, large
    corporate cash management revenue previously reported in business banking
    within CIBC Retail Markets, was retroactively transferred to corporate
    and investment banking within Wholesale Banking. Prior period amounts
    were 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 total bank results.

    -------------------------------------------------------------------------
                                       CIBC
    $ millions, for the              Retail  Wholesale  Corporate       CIBC
     three months ended             Markets    Banking  and Other      Total
    -------------------------------------------------------------------------
    Jul. 31, 2010
      Net interest income
       (expense)                   $  1,515   $    145   $   (112)  $  1,548
      Non-interest income               957        170        174      1,301
    -------------------------------------------------------------------------
      Total revenue                   2,472        315         62      2,849
      Provision for (reversal of)
       credit losses                    304         29       (112)       221
      Amortization(1)                    32          1         58         91
      Other non-interest expenses     1,320        257         73      1,650
    -------------------------------------------------------------------------
      Income before income taxes
       and non-controlling
       interests                        816         28         43        887
      Income tax expense                214          3         27        244
      Non-controlling interests           3          -          -          3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Net income                   $    599   $     25   $     16   $    640
    -------------------------------------------------------------------------
      Average assets(2)            $273,094   $106,710   $(26,712)  $353,092
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Apr. 30, 2010
      Net interest income
       (expense)                   $  1,440   $    172   $   (115)  $  1,497
      Non-interest income               894        376        154      1,424
    -------------------------------------------------------------------------
      Total revenue                   2,334        548         39      2,921
      Provision for (reversal of)
       credit losses                    334         27        (45)       316
      Amortization(1)                    28          1         65         94
      Other non-interest expenses     1,302        243         39      1,584
    -------------------------------------------------------------------------
      Income (loss) before income
       taxes and non-controlling
       interests                        670        277        (20)       927
      Income tax expense (benefit)      178         87         (4)       261
      Non-controlling interests           5          1          -          6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Net income (loss)            $    487   $    189   $    (16)  $    660
    -------------------------------------------------------------------------
      Average assets(2)            $261,145   $ 99,462   $(27,018)  $333,589
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jul. 31, 2009(3)
      Net interest income
       (expense)                   $  1,441   $     89   $   (161)  $  1,369
      Non-interest income               877        463        148      1,488
    -------------------------------------------------------------------------
      Total revenue                   2,318        552        (13)     2,857
      Provision for credit losses       417        129          1        547
      Amortization(1)                    26          2         70         98
      Other non-interest expenses     1,284        270         47      1,601
    -------------------------------------------------------------------------
      Income (loss) before income
       taxes and non-controlling
       interests                        591        151       (131)       611
      Income tax expense (benefit)      170         61        (59)       172
      Non-controlling interests           5          -          -          5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Net income (loss)            $    416   $     90   $    (72)  $    434
    -------------------------------------------------------------------------
      Average assets(2)            $263,996   $104,808   $(28,143)  $340,661
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                       CIBC
    $ millions, for the              Retail  Wholesale  Corporate       CIBC
     nine months ended              Markets    Banking  and Other      Total
    -------------------------------------------------------------------------
    Jul. 31, 2010
      Net interest income
       (expense)                   $  4,462   $    464   $   (367)  $  4,559
      Non-interest income             2,746      1,012        514      4,272
    -------------------------------------------------------------------------
      Total revenue                   7,208      1,476        147      8,831
      Provision for (reversal of)
       credit losses                  1,003         80       (187)       896
      Amortization(1)                    89          3        187        279
      Other non-interest expenses     3,907        817        164      4,888
    -------------------------------------------------------------------------
      Income (loss) before income
       taxes and non-controlling
       interests                      2,209        576        (17)     2,768
      Income tax expense                581        166         44        791
      Non-controlling interests          13         12          -         25
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Net income (loss)            $  1,615   $    398   $    (61)  $  1,952
    -------------------------------------------------------------------------
      Average assets(2)            $266,981   $102,721   $(27,103)  $342,599
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Jul. 31, 2009(3)
      Net interest income
       (expense)                   $  3,911   $    341   $   (277)  $  3,975
      Non-interest income
       (expense)                      3,003       (332)       394      3,065
      Intersegment revenue(4)             2          -         (2)         -
    -------------------------------------------------------------------------
      Total revenue                   6,916          9        115      7,040
      Provision for credit losses     1,020        136         69      1,225
      Amortization(1)                    92          5        204        301
      Other non-interest expenses     3,798        810         82      4,690
    -------------------------------------------------------------------------
      Income (loss) before income
       taxes and non-controlling
       interests                      2,006       (942)      (240)       824
      Income tax expense (benefit)      564       (310)        25        279
      Non-controlling interests          15          -          -         15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Net income (loss)            $  1,427   $   (632)  $   (265)  $    530
    -------------------------------------------------------------------------
      Average assets(2)            $264,319   $114,671   $(24,405)  $354,585
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes amortization of buildings, furniture, equipment, leasehold
        improvements, software and finite-lived 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.
    (4) Intersegment revenue represents internal sales commissions and
        revenue allocations under the Manufacturer/Customer
        Segment/Distributor Management Model.

    15. Accounting developments

    Transition to International Financial Reporting Standards (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
    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.

    The transition to IFRS represents a significant initiative for us and is
    supported by a formal governance structure with an enterprise 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 full
    restatement, available under the transitional rules that we continue to
    evaluate.

    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. Proposed changes to the IFRS accounting standards,
    including the changes related to employee future benefits noted above,
    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 2012.

    The impact of IFRS to us at transition will ultimately depend on the IFRS
    standards and capital reporting rules in effect at the time, accounting
    elections that have not yet been finalized, and the prevailing business
    and economic facts and circumstances.
    

%SEDAR: 00002543EF

SOURCE CIBC

For further information: For further information: Investor and analyst inquiries should be directed to John Ferren, Vice-President, Investor Relations, at 416-980-2088; Media inquiries should be directed to Rob McLeod, Senior Director, Communications and Public Affairs, at 416-980-3714, or to Mary Lou Frazer, Senior Director, Investor & Financial Communications, at 416-980-4111


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