CIBC Provides Update to Previous Disclosure on U.S. Subprime Real Estate CDO / RMBS including Likely Large Write-down in First Quarter 2008 Financial Results



    TORONTO, Dec. 19 /CNW/ - Following Standard and Poor's announcement today
that it had reduced the credit rating of ACA Financial Guaranty Corp. from "A"
to "CCC", CIBC confirmed that ACA is a hedge counterparty to CIBC in respect
of approximately U.S. $3.5 billion of its U.S. subprime real estate exposure.
    It is not known whether ACA will continue as a viable counterparty to
CIBC. Although CIBC believes it is premature to predict the outcome, CIBC
believes there is a reasonably high probability that it will incur a large
charge in its financial results for the First Quarter ending January 31, 2008.
    As CIBC disclosed on page 52 of its Investor Presentation dated December
6, 2007, the mark of the hedge protection from the "A-rated" counterparty
(ACA) as at October 31, 2007 was U.S. $1.71 billion. As at November 30, 2007,
this mark was US$2.0 billion. If the charge in the First Quarter were to be
U.S. $2.0 billion (US$1.3 billion after tax) CIBC currently projects its Tier
1 capital ratio to remain in excess of 9% as at January 31, 2008.

    Forward Looking Statement

    From time to time, we make written or oral forward-looking statements
within the meaning of certain securities laws, including in this press
release, 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 we make about the
possibility that we will incur a large charge in our financial results for the
First Quarter ending January 31, 2008 and the potential amount of that charge,
as well as statements we make about our operations, business lines, financial
condition, risk management, priorities, targets, ongoing objectives,
strategies and outlook for 2008 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 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: the creditworthiness and continued viability of our
counterparties; the continued volatility in the U.S. residential mortgage
market; 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; that our estimate of
sustainable effective tax rate will not be achieved; 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; interest rate and currency value
fluctuations; general 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; 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 press release or in other communications
except as required by law.





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


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890