# Consolidated financial statements

## Consolidated financial statements

| Page | Item |
|---|---|
| 108 | Financial reporting responsibility |
| 109 | Independent auditor's report - Canadian generally accepted auditing standards |
| 113 | Report of independent registered public accounting firm - Standards of the Public Company Accounting Oversight Board (United States) |
| 116 | Report of independent registered public accounting firm - Internal control over financial reporting |
| 117 | Consolidated balance sheet |
| 118 | Consolidated statement of income |
| 119 | Consolidated statement of comprehensive income |
| 120 | Consolidated statement of changes in equity |
| 121 | Consolidated statement of cash flows |
| 122 | Notes to the consolidated financial statements |

## Details of the notes to the consolidated financial statements

| Page | Note | Description | Page | Note | Description |
|---|---|---|---|---|---|
| 122 | Note 1 | Basis of preparation and summary of significant accounting policies | 173 | Note 17 | Capital Trust securities |
| 135 | Note 2 | Impact of COVID-19 | 174 | Note 18 | Share-based payments |
| 136 | Note 3 | Fair value measurement | 176 | Note 19 | Post-employment benefits |
| 143 | Note 4 | Significant transactions | 181 | Note 20 | Income taxes |
| 143 | Note 5 | Securities | 183 | Note 21 | Earnings per share |
| 145 | Note 6 | Loans | 184 | Note 22 | Commitments, guarantees and pledged assets |
| 153 | Note 7 | Structured entities and derecognition of financial assets | 185 | Note 23 | Contingent liabilities and provisions |
| 156 | Note 8 | Property and equipment | 189 | Note 24 | Concentration of credit risk |
| 156 | Note 9 | Goodwill, software and other intangible assets | 190 | Note 25 | Related-party transactions |
| 158 | Note 10 | Other assets | 191 | Note 26 | Investments in equity-accounted associates and joint ventures |
| 159 | Note 11 | Deposits | 192 | Note 27 | Significant subsidiaries |
| 159 | Note 12 | Other liabilities | 193 | Note 28 | Financial instruments - disclosures |
| 159 | Note 13 | Derivative instruments | 194 | Note 29 | Offsetting financial assets and liabilities |
| 164 | Note 14 | Designated accounting hedges | 194 | Note 30 | Interest income and expense |
| 168 | Note 15 | Subordinated indebtedness | 195 | Note 31 | Segmented and geographic information |
| 169 | Note 16 | Common and preferred shares and other equity instruments | 197 | Note 32 | Future accounting policy changes |

## Consolidated financial statements

### Financial reporting responsibility

Management of Canadian Imperial Bank of Commerce (CIBC) is responsible for the preparation, presentation, accuracy and reliability of the Annual Report, which includes the consolidated financial statements and management's discussion and analysis (MD&A). The consolidated financial statements have been prepared in accordance with Section 308(4) of the Bank Act (Canada), which requires that the financial statements be prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The MD&A has been prepared in accordance with the requirements of applicable securities laws.

The consolidated financial statements and MD&A contain items that reflect the best estimates and judgments of the expected effects of current events and transactions with appropriate consideration to materiality. Financial information appearing throughout the Annual Report is consistent with the consolidated financial statements.

Management has developed and maintained effective systems, controls and procedures to ensure that information used internally and disclosed externally is reliable and timely. CIBC's system of internal controls and supporting procedures are designed to provide reasonable assurance that transactions are authorized, assets are safeguarded and proper records are maintained. These internal controls and supporting procedures include the communication of policies and guidelines, the establishment of an organizational structure that provides appropriate and well-defined responsibilities and accountability, and the careful selection and training of qualified staff. Management has assessed the effectiveness of CIBC's internal control over financial reporting as at year-end using the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based upon this assessment, we have determined that internal control over financial reporting is effective in all material respects and CIBC is in compliance with the requirements set by the U.S. Securities and Exchange Commission (SEC) under the U.S. Sarbanes-Oxley Act.

CIBC's Chief Executive Officer and Chief Financial Officer have certified CIBC's annual filings with the SEC under the U.S. Sarbanes-Oxley Act and with the Canadian Securities Administrators under Canadian securities laws.

The Internal Audit department reviews and reports on the effectiveness of CIBC's internal control, risk management and governance systems and processes, including accounting and financial controls, in accordance with the audit plan approved by the Audit Committee. Our Chief Auditor has unfettered access to the Audit Committee.

The Board of Directors oversees management's responsibilities for financial reporting through the Audit Committee, which is composed of independent directors. The Audit Committee reviews CIBC's interim and annual consolidated financial statements and MD&A and recommends them for approval by the Board of Directors. Other key responsibilities of the Audit Committee include monitoring CIBC's system of internal control, and reviewing the qualifications, independence and service quality of the shareholders' auditor and the performance of CIBC's internal auditors.

Ernst & Young LLP, the shareholders' auditor, obtains an understanding of CIBC's internal controls and procedures for financial reporting to plan and conduct such tests and other audit procedures as they consider necessary in the circumstances to express their opinions in the reports that follow. Ernst & Young LLP has unrestricted access to the Audit Committee to discuss their audit and related matters.

The Office of the Superintendent of Financial Institutions (OSFI) Canada is mandated to protect the rights and interest of depositors and creditors of CIBC. Accordingly, OSFI examines and enquires into the business and affairs of CIBC, as deemed necessary, to ensure that the provisions of the Bank Act (Canada) are being complied with and that CIBC is in sound financial condition.

| | | |
|---|---|---|
| Victor G. Dodig | Hratch Panossian | December 1, 2021 |
| President and Chief Executive Officer | Chief Financial Officer | |

### Independent auditor's report

#### To the shareholders and directors of Canadian Imperial Bank of Commerce

#### Opinion

We have audited the consolidated financial statements of Canadian Imperial Bank of Commerce (CIBC), which comprise the consolidated balance sheets as at October 31, 2021 and 2020, and the consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of changes in equity and the consolidated statements of cash flows for each of the years in the three-year period ended October 31, 2021, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "consolidated financial statements").

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of CIBC as at October 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for each of the years in the three-year period ended October 31, 2021 in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

#### Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the "Auditor's responsibilities for the audit of the consolidated financial statements" section of our report. We are independent of CIBC in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

#### Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended October 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the "Auditor's responsibilities for the audit of the consolidated financial statements" section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements.

| Key audit matter | How our audit addressed the key audit matter |
|---|---|
| **Allowance for credit losses** | As described in Note 1 and Note 6 to the consolidated financial statements, CIBC has used an expected credit loss (ECL) model to recognize $3.0 billion in allowances for credit losses on its consolidated balance sheet. ECL allowances represent an unbiased and probability-weighted amount, which is determined by evaluating a range of possible outcomes and reasonable and supportable information about past events, current conditions, and forecasts of future economic conditions. Forward-looking information (FLI), which involves significant judgment, is explicitly incorporated into the estimation of ECL allowances. ECL allowances are measured at amounts equal to either (i) 12-month ECL; or (ii) lifetime ECL for those financial instruments that have experienced a significant increase in credit risk (SICR) since initial recognition or when there is objective evidence of impairment. |
| | Auditing the allowance for credit losses was complex, involved significant auditor judgment, and required the involvement of specialists due to the inherent complexity of the models, the large volume of data used, assumptions, judgments, and the interrelationship of these variables in measuring the ECL. Significant assumptions and judgments with respect to the estimation of the allowance for credit losses include (i) the determination of when a loan has experienced a SICR; (ii) the forecast of FLI for multiple economic scenarios and the probability weighting of those scenarios; (iii) the calculation of both 12-month and lifetime credit losses; and (iv) the application of expert credit judgment. Management has applied a heightened use of judgment in the areas noted above, when assessing the impact of COVID-19 on the allowance for credit losses. Specifically, management has applied judgment in assessing the effect of certain credit metrics and forward-looking information in the current environment given the impact of COVID-19. |
| | We obtained an understanding, evaluated the design and tested the operating effectiveness of management's controls, including those related to technology, over the allowance for credit losses. The controls we tested included, amongst others, controls over model development, validation and monitoring, economic forecasting, data completeness and accuracy, the determination of internal risk ratings for non-retail loans, and the governance and oversight controls over the review of the overall ECL, including the application of expert credit judgment. |
| | To test the allowance for credit losses, amongst other procedures, we assessed, with the assistance of our credit risk specialists, whether the methodology and assumptions used in significant models that estimate ECL are consistent with the requirements of IFRS and industry standards. For a sample of models, our credit risk specialists reperformed the model validation and monitoring tests performed by management. This included an assessment of the thresholds used to determine a SICR. For a sample of FLI variables, with the assistance of our economic specialists, we evaluated management's forecasting methodology and compared management's FLI to independently derived forecasts and publicly available information. We also evaluated the scenario probability weights used in the ECL models. With the assistance of our credit risk specialists, we also evaluated management's methodology and governance over the application of expert credit judgment by evaluating that the amounts recorded were reflective of underlying credit and/or economic conditions including the impact of COVID-19. We tested the completeness and accuracy of data used in the measurement of the ECL by agreeing to documents and systems and evaluated a sample of non-retail borrower risk ratings against CIBC's risk rating scale. On a sample basis, we recalculated the ECL to test the mathematical accuracy of management's models. We also assessed the adequacy of the allowance for credit loss financial statement note disclosures. |
| **Fair value measurement of derivatives** | As described in Note 3 and Note 13 of the consolidated financial statements, CIBC has recognized $35.9 billion in derivative assets and $32.1 billion in derivative liabilities. The portfolio of derivative instruments is presented by level within the fair value hierarchy, with the majority of the portfolio classified as Level 2. While derivative instruments classified as Level 1 have quoted market prices, those classified as Level 2 and 3 require valuation techniques that use observable and non-observable market inputs and involve the application of management judgment. |
| | Auditing the valuation of derivatives was complex and required the application of significant auditor judgment and involvement of valuation specialists where the fair value was determined based on complex models and/or significant non-observable market inputs, including any significant valuation adjustments. The inputs and modelling assumptions used to determine fair value that were subject to significant auditor judgment included, amongst others, correlations, volatilities and credit spreads. The valuation of derivatives is sensitive to these inputs as they are forward-looking and could be affected by future economic and market conditions. |
| | We obtained an understanding, evaluated the design and tested the operating effectiveness of management's controls over the valuation of CIBC's derivatives portfolio, including those related to technology. The controls we tested included, amongst others, controls over the development and validation of models used to determine the fair value of derivatives, controls over the independent price verification process, including the integrity of significant inputs described above, and controls over the review of significant valuation adjustments applied. |
| | To test the valuation of these derivatives, our audit procedures included, amongst others, an evaluation of the methodologies and significant inputs used by CIBC. With the assistance of our valuation specialists, we performed an independent valuation for a sample of derivatives and valuation adjustments to assess the modelling assumptions and significant inputs used by CIBC to estimate the fair value. We independently obtained significant inputs from external market data in performing our independent valuation. For a sample of models, and with the assistance of our valuation specialists, we assessed the valuation methodologies used by CIBC to determine fair value. We also assessed the adequacy of the disclosures related to the fair value measurement of derivatives. |
| **Measurement of uncertain tax provisions** | As described in Note 20 of the consolidated financial statements, CIBC has disclosed its significant accounting judgments, estimates and assumptions in relation to accounting for uncertainty in income taxes. CIBC operates in a tax environment with constantly evolving and complex tax legislation for financial institutions. Uncertainty in tax positions may arise as tax legislation is subject to interpretation. Estimating uncertain tax provisions requires management judgment to be applied in the interpretation of tax laws across the various jurisdictions in which CIBC operates. This includes significant judgment in the determination of whether it is probable that CIBC's tax filing positions will be sustained relating to certain complex tax positions and the measurement of such provision when recognized. |
| | Auditing CIBC's uncertain tax provisions required the involvement of our tax professionals and the application of judgment, including the interpretation of applicable tax legislation and jurisprudence. |
| | We obtained an understanding, evaluated the design and tested the operating effectiveness of management's controls over CIBC's uncertain tax provisions. This included, amongst others, controls over management's assessment of the technical merits of tax positions and the process related to the measurement of any related income tax provisions. |
| | With the assistance of our tax professionals, our audit procedures included, amongst others, an assessment of the technical merits of income tax positions taken by CIBC and the measurement of any related uncertain tax provisions recorded. We inspected and evaluated correspondence from the relevant income tax authorities, income tax advice obtained by CIBC from external advisors including income tax opinions, CIBC's interpretations of tax laws and the assessment thereof with respect to uncertain tax positions. We evaluated the reasonability of CIBC's treatment of any new information received during the year relating to the amounts recorded. We also assessed the adequacy of the disclosures related to uncertain tax positions. |

### Report of independent registered public accounting firm

#### To the shareholders and directors of Canadian Imperial Bank of Commerce

#### Opinion on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Canadian Imperial Bank of Commerce (CIBC) as of October 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended October 31, 2021, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of CIBC at October 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for each of the years in the three-year period ended October 31, 2021 in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), CIBC's internal control over financial reporting as of October 31, 2021, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated December 1, 2021 expressed an unqualified opinion thereon.

#### Basis for opinion

These consolidated financial statements are the responsibility of CIBC's management. Our responsibility is to express an opinion on CIBC's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to CIBC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

#### Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

| Description of the matter | How we addressed the matter in our audit |
|---|---|
| **Allowance for credit losses** | As described in Note 1 and Note 6 to the consolidated financial statements, CIBC has used an expected credit loss (ECL) model to recognize $3.0 billion in allowances for credit losses on its consolidated balance sheet. ECL allowances represent an unbiased and probability-weighted amount, which is determined by evaluating a range of possible outcomes and reasonable and supportable information about past events, current conditions, and forecasts of future economic conditions. Forward-looking information (FLI), which involves significant judgment, is explicitly incorporated into the estimation of ECL allowances. ECL allowances are measured at amounts equal to either (i) 12-month ECL; or (ii) lifetime ECL for those financial instruments that have experienced a significant increase in credit risk (SICR) since initial recognition or when there is objective evidence of impairment. |
| | Auditing the allowance for credit losses was complex, involved significant auditor judgment, and required the involvement of specialists due to the inherent complexity of the models, the large volume of data used, assumptions, judgments, and the interrelationship of these variables in measuring the ECL. Significant assumptions and judgments with respect to the estimation of the allowance for credit losses include (i) the determination of when a loan has experienced a SICR; (ii) the forecast of FLI for multiple economic scenarios and the probability weighting of those scenarios; (iii) the calculation of both 12-month and lifetime credit losses; and (iv) the application of expert credit judgment. Management has applied a heightened use of judgment in the areas noted above, when assessing the impact of COVID-19 on the allowance for credit losses. Specifically, management has applied judgment in assessing the effect of certain credit metrics and forward-looking information in the current environment given the impact of COVID-19. |
| | We obtained an understanding, evaluated the design and tested the operating effectiveness of management's controls, including those related to technology, over the allowance for credit losses. The controls we tested included, amongst others, controls over model development, validation and monitoring, economic forecasting, data completeness and accuracy, the determination of internal risk ratings for non-retail loans, and the governance and oversight controls over the review of the overall ECL, including the application of expert credit judgment. |
| | To test the allowance for credit losses, amongst other procedures, we assessed, with the assistance of our credit risk specialists, whether the methodology and assumptions used in significant models that estimate ECL are consistent with the requirements of IFRS and industry standards. For a sample of models, our credit risk specialists reperformed the model validation and monitoring tests performed by management. This included an assessment of the thresholds used to determine a SICR. For a sample of FLI variables, with the assistance of our economic specialists, we evaluated management's forecasting methodology and compared management's FLI to independently derived forecasts and publicly available information. We also evaluated the scenario probability weights used in the ECL models. With the assistance of our credit risk specialists, we also evaluated management's methodology and governance over the application of expert credit judgment by evaluating that the amounts recorded were reflective of underlying credit and/or economic conditions including the impact of COVID-19. We tested the completeness and accuracy of data used in the measurement of the ECL by agreeing to documents and systems and evaluated a sample of non-retail borrower risk ratings against CIBC's risk rating scale. On a sample basis, we recalculated the ECL to test the mathematical accuracy of management's models. We also assessed the adequacy of the allowance for credit loss financial statement note disclosures. |
| **Fair value measurement of derivatives** | As described in Note 3 and Note 13 of the consolidated financial statements, CIBC has recognized $35.9 billion in derivative assets and $32.1 billion in derivative liabilities. The portfolio of derivative instruments is presented by level within the fair value hierarchy, with the majority of the portfolio classified as Level 2. While derivative instruments classified as Level 1 have quoted market prices, those classified as Level 2 and 3 require valuation techniques that use observable and non-observable market inputs and involve the application of management judgment. |
| | Auditing the valuation of derivatives was complex and required the application of significant auditor judgment and involvement of valuation specialists where the fair value was determined based on complex models and/or significant non-observable market inputs, including any significant valuation adjustments. The inputs and modelling assumptions used to determine fair value that were subject to significant auditor judgment included, amongst others, correlations, volatilities and credit spreads. The valuation of derivatives is sensitive to these inputs as they are forward-looking and could be affected by future economic and market conditions. |
| | We obtained an understanding, evaluated the design and tested the operating effectiveness of management's controls over the valuation of CIBC's derivatives portfolio, including those related to technology. The controls we tested included, amongst others, controls over the development and validation of models used to determine the fair value of derivatives, controls over the independent price verification process, including the integrity of significant inputs described above, and controls over the review of significant valuation adjustments applied. |
| | To test the valuation of these derivatives, our audit procedures included, amongst others, an evaluation of the methodologies and significant inputs used by CIBC. With the assistance of our valuation specialists, we performed an independent valuation for a sample of derivatives and valuation adjustments to assess the modelling assumptions and significant inputs used by CIBC to estimate the fair value. We independently obtained significant inputs from external market data in performing our independent valuation. For a sample of models, and with the assistance of our valuation specialists, we assessed the valuation methodologies used by CIBC to determine fair value. We also assessed the adequacy of the disclosures related to the fair value measurement of derivatives. |
| **Measurement of uncertain tax provisions** | As described in Note 20 of the consolidated financial statements, CIBC has disclosed its significant accounting judgments, estimates and assumptions in relation to accounting for uncertainty in income taxes. CIBC operates in a tax environment with constantly evolving and complex tax legislation for financial institutions. Uncertainty in tax positions may arise as tax legislation is subject to interpretation. Estimating uncertain tax provisions requires management judgment to be applied in the interpretation of tax laws across the various jurisdictions in which CIBC operates. This includes significant judgment in the determination of whether it is probable that CIBC's tax filing positions will be sustained relating to certain complex tax positions and the measurement of such provision when recognized. |
| | Auditing CIBC's uncertain tax provisions required the involvement of our tax professionals and the application of judgment, including the interpretation of applicable tax legislation and jurisprudence. |
| | We obtained an understanding, evaluated the design and tested the operating effectiveness of management's controls over CIBC's uncertain tax provisions. This included, amongst others, controls over management's assessment of the technical merits of tax positions and the process related to the measurement of any related income tax provisions. |
| | With the assistance of our tax professionals, our audit procedures included, amongst others, an assessment of the technical merits of income tax positions taken by CIBC and the measurement of any related uncertain tax provisions recorded. We inspected and evaluated correspondence from the relevant income tax authorities, income tax advice obtained by CIBC from external advisors including income tax opinions, CIBC's interpretations of tax laws and the assessment thereof with respect to uncertain tax positions. We evaluated the reasonability of CIBC's treatment of any new information received during the year relating to the amounts recorded. We also assessed the adequacy of the disclosures related to uncertain tax positions. |

### Report of independent registered public accounting firm

#### To the shareholders and directors of Canadian Imperial Bank of Commerce

#### Opinion on internal control over financial reporting

We have audited Canadian Imperial Bank of Commerce's (CIBC) internal control over financial reporting as of October 31, 2021, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, CIBC maintained, in all material respects, effective internal control over financial reporting as of October 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of CIBC as of October 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended October 31, 2021, and the related notes and our report dated December 1, 2021 expressed an unqualified opinion thereon.

#### Basis for opinion

CIBC's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the "Management's annual report on internal control over financial reporting" section contained in the accompanying management's discussion and analysis. Our responsibility is to express an opinion on CIBC's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to CIBC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

#### Definition and limitations of internal control over financial reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

| /s/ Ernst & Young LLP | |
|---|---|
| Chartered Professional Accountants | |
| Licensed Public Accountants | |
| Toronto, Canada | |
| December 1, 2021 | |

## Consolidated balance sheet

Millions of Canadian dollars, as at October 31

| ASSETS | 2021 | 2020 |
|---|---|---|
| Cash and non-interest-bearing deposits with banks | \$ 34,573 | \$ 43,531 |
| Interest-bearing deposits with banks | 22,424 | 18,987 |
| Securities (Note 5) | 161,401 | 149,046 |
| Cash collateral on securities borrowed | 12,368 | 8,547 |
| Securities purchased under resale agreements | 67,572 | 65,595 |
| Loans (Note 6) | 451,921 | 406,782 |
| Residential mortgages | 251,526 | 221,165 |
| Personal | 41,897 | 42,222 |
| Credit card | 11,134 | 11,389 |
| Business and government | 150,213 | 135,546 |
| Allowance for credit losses | (2,849) | (3,540) |
| Other | 87,424 | 77,063 |
| Derivative instruments (Note 13) | 35,912 | 32,730 |
| Customers' liability under acceptances | 10,958 | 9,606 |
| Property and equipment (Note 8) | 3,286 | 2,997 |
| Goodwill (Note 9) | 4,954 | 5,253 |
| Software and other intangible assets (Note 9) | 2,029 | 1,961 |
| Investments in equity-accounted associates and joint ventures (Note 26) | 658 | 658 |
| Deferred tax assets (Note 20) | 402 | 650 |
| Other assets (Note 10) | 29,225 | 23,208 |
| **Total assets** | **\$ 837,683** | **\$ 769,551** |
| **LIABILITIES AND EQUITY** | | |
| Deposits (Note 11) | 621,158 | 570,740 |
| Personal | 213,932 | 202,152 |
| Business and government | 344,388 | 311,426 |
| Bank | 20,246 | 17,011 |
| Secured borrowings | 42,592 | 40,151 |
| Obligations related to securities sold short | 22,790 | 15,963 |
| Cash collateral on securities lent | 2,463 | 1,824 |
| Obligations related to securities sold under repurchase agreements | 71,880 | 71,653 |
| Other | 68,023 | 62,324 |
| Derivative instruments (Note 13) | 32,101 | 30,508 |
| Acceptances | 10,961 | 9,649 |
| Deferred tax liabilities (Note 20) | 38 | 33 |
| Other liabilities (Note 12) | 24,923 | 22,134 |
| Subordinated indebtedness (Note 15) | 5,539 | 5,712 |
| Equity | 45,830 | 41,335 |
| Preferred shares and other equity instruments (Note 16) | 4,325 | 3,575 |
| Common shares (Note 16) | 14,351 | 13,908 |
| Contributed surplus | 110 | 117 |
| Retained earnings | 25,793 | 22,119 |
| Accumulated other comprehensive income (AOCI) | 1,069 | 1,435 |
| Total shareholders' equity | 45,648 | 41,154 |
| Non-controlling interests | 182 | 181 |
| Total equity | 45,830 | 41,335 |
| **Total equity** | **\$ 837,683** | **\$ 769,551** |

The accompanying notes and shaded sections in "MD&A – Management of risk" are an integral part of these consolidated financial statements.

| Victor G. Dodig | Nicholas D. Le Pan |
|---|---|
| President and Chief Executive Officer | Director |

## Consolidated statement of income

Millions of Canadian dollars, except as noted, for the year ended October 31

| Interest income (Note 30) (1) | 2021 | 2020 | 2019 |
|---|---|---|---|
| Loans | \$ 12,150 | \$ 13,863 | \$ 16,048 |
| Securities | 2,141 | 2,568 | 2,779 |
| Securities borrowed or purchased under resale agreements | 319 | 842 | 1,474 |
| Deposits with banks | 131 | 249 | 396 |
| **Total interest income** | **14,741** | **17,522** | **20,697** |
| Interest expense (Note 30) | | | |
| Deposits | 2,651 | 5,326 | 8,422 |
| Securities sold short | 236 | 254 | 291 |
| Securities lent or sold under repurchase agreements | 208 | 156 | 198 |
| Subordinated indebtedness | 122 | 159 | 198 |
| Other | 65 | 83 | 37 |
| **Total interest expense** | **3,282** | **6,478** | **10,146** |
| **Net interest income** | **11,459** | **11,044** | **10,551** |
| **Non-interest income** | | | |
| Underwriting and advisory fees | 713 | 468 | 475 |
| Deposit and payment fees | 797 | 781 | 908 |
| Credit fees | 1,152 | 1,020 | 958 |
| Card fees | 460 | 410 | 458 |
| Investment management and custodial fees | 1,621 | 1,382 | 1,305 |
| Mutual fund fees | 1,772 | 1,586 | 1,595 |
| Insurance fees, net of claims | 358 | 386 | 430 |
| Commissions on securities transactions | 426 | 362 | 313 |
| Gains (losses) from financial instruments measured/designated at fair value through profit or loss (FVTPL), net | 607 | 694 | 761 |
| Gains (losses) from debt securities measured at fair value through other comprehensive income (FVOCI) and amortized cost, net | 90 | 9 | 34 |
| Foreign exchange other than trading (FXOTT) | 276 | 234 | 304 |
| Income from equity-accounted associates and joint ventures (Note 26) | 55 | 79 | 92 |
| Other | 229 | 286 | 427 |
| **Total revenue** | **8,556** | **7,697** | **8,060** |
| **Total revenue** | **20,015** | **18,741** | **18,611** |
| Provision for credit losses (Note 6) | 158 | 2,489 | 1,286 |
| **Non-interest expenses** | | | |
| Employee compensation and benefits | 6,450 | 6,259 | 5,726 |
| Occupancy costs | 916 | 944 | 892 |
| Computer, software and office equipment | 2,030 | 1,939 | 1,874 |
| Communications | 318 | 308 | 303 |
| Advertising and business development | 237 | 271 | 359 |
| Professional fees | 277 | 203 | 226 |
| Business and capital taxes | 111 | 117 | 110 |
| Other (Notes 4 and 9) | 1,196 | 1,321 | 1,366 |
| **Total non-interest expenses** | **11,535** | **11,362** | **10,856** |
| **Income before income taxes** | **8,322** | **4,890** | **6,469** |
| Income taxes (Note 20) | 1,876 | 1,098 | 1,348 |
| **Net income** | **6,446** | **3,792** | **5,121** |
| Net income attributable to non-controlling interests | 17 | 2 | 25 |
| Preferred shareholders and other equity instrument holders | 158 | 122 | 111 |
| **Net income attributable to equity shareholders** | **\$ 6,271** | **\$ 3,668** | **\$ 4,985** |
| **Earnings per share (EPS) (in dollars) (Note 21)** | | | |
| Basic | 13.97 | 8.23 | 11.22 |
| Diluted | 13.93 | 8.22 | 11.19 |
| **Dividends per common share (in dollars) (Note 16)** | **5.84** | **5.82** | **5.60** |

(1) Interest income included $13.2 billion for the year ended October 31, 2021 (2020: $15.7 billion; 2019: $18.8 billion) calculated based on the effective interest rate method.

The accompanying notes and shaded sections in "MD&A - Management of risk" are an integral part of these consolidated financial statements.

## Consolidated statement of comprehensive income

Millions of Canadian dollars, for the year ended October 31

| Net income | 2021 | 2020 | 2019 |
|---|---|---|---|
| **Other comprehensive income (loss) (OCI), net of income tax, that is subject to subsequent reclassification to net income** | **\$ 6,446** | **\$ 3,792** | **\$ 5,121** |
| Net foreign currency translation adjustments | | | |
| Net gains (losses) on investments in foreign operations | (2,610) | 382 | (21) |
| Net gains (losses) on hedges of investments in foreign operations | 1,495 | (202) | (10) |
| Net change in debt securities measured at FVOCI | (1,115) | 180 | (31) |
| Net gains (losses) on securities measured at FVOCI | (50) | 254 | 244 |
| Net (gains) losses reclassified to net income | (66) | (22) | (28) |
| Net change in cash flow hedges | (116) | 232 | 216 |
| Net gains (losses) on derivatives designated as cash flow hedges | 178 | 142 | 137 |
| Net (gains) losses reclassified to net income | (315) | 19 | (6) |
| **OCI, net of income tax, that is not subject to subsequent reclassification to net income** | **(137)** | **161** | **131** |
| Net gains (losses) on post-employment defined benefit plans | 917 | 80 | (220) |
| Net gains (losses) due to fair value change of fair value option (FVO) liabilities attributable to changes in credit risk | 12 | (56) | 28 |
| Net gains (losses) on equity securities designated at FVOCI | 100 | 50 | (2) |
| **Total OCI (1)** | **1,029** | **74** | **(194)** |
| **Comprehensive income** | **\$ (339)** | **647** | **122** |
| **Comprehensive income** | **\$ 6,107** | **\$ 4,439** | **\$ 5,243** |
| **Comprehensive income attributable to non-controlling interests** | **\$ 17** | **\$ 2** | **\$ 25** |
| Preferred shareholders and other equity instrument holders | \$ 158 | \$ 122 | \$ 111 |
| Common shareholders | 5,932 | 4,315 | 5,107 |
| **Comprehensive income attributable to equity shareholders** | **\$ 6,090** | **\$ 4,437** | **\$ 5,218** |

(1) Includes $43 million of losses for 2021 (2020: $44 million of gains; 2019: $44 million of gains) relating to our investments in equity-accounted associates and joint ventures.

Millions of Canadian dollars, for the year ended October 31

| Income tax (expense) benefit allocated to each component of OCI | 2021 | 2020 | 2019 |
|---|---|---|---|
| Subject to subsequent reclassification to net income | | | |
| Net foreign currency translation adjustments | | | |
| Net gains (losses) on investments in foreign operations | \$ 45 | \$ 42 | \$ 16 |
| Net gains (losses) on hedges of investments in foreign operations | (53) | (46) | (16) |
| Net change in debt securities measured at FVOCI | (8) | (4) | (16) |
| Net gains (losses) on securities measured at FVOCI | (11) | (59) | (36) |
| Net (gains) losses reclassified to net income | 23 | 7 | 10 |
| Net change in cash flow hedges | 12 | (52) | (26) |
| Net gains (losses) on derivatives designated as cash flow hedges | (64) | (51) | (49) |
| Net (gains) losses reclassified to net income | 112 | (7) | 2 |
| **Not subject to subsequent reclassification to net income** | **48** | **(58)** | **(47)** |
| Net gains (losses) on post-employment defined benefit plans | (311) | (19) | 77 |
| Net gains (losses) due to fair value change of FVO liabilities attributable to changes in credit risk | (4) | 20 | (10) |
| Net gains (losses) on equity securities designated at FVOCI | (34) | (17) | (349) |
| | **\$ (297)** | **\$ (130)** | **\$ (22)** |

The accompanying notes and shaded sections in "MD&A - Management of risk" are an integral part of these consolidated financial statements.

## Consolidated statement of changes in equity

Millions of Canadian dollars, for the year ended October 31

| Preferred shares and other equity instruments (Note 16) | 2021 | 2020 | 2019 |
|---|---|---|---|
| Balance at beginning of year | \$ 3,575 | \$ 2,825 | \$ 2,250 |
| Issue of preferred shares and limited recourse capital notes (LRCNS) | 750 | 750 | 575 |
| Balance at end of year | **\$ 4,325** | **\$ 3,575** | **\$ 2,825** |
| **Common shares (Note 16)** | | | |
| Balance at beginning of year | \$ 13,908 | \$ 13,591 | \$ 13,243 |
| Issue of common shares | 458 | 371 | 377 |
| Purchase of common shares for cancellation | (15) | (68) | (30) |
| Treasury shares | - | 1 | - |
| Balance at end of year | **\$ 14,351** | **\$ 13,908** | **\$ 13,591** |
| **Contributed surplus** | | | |
| Balance at beginning of year | \$ 117 | \$ 125 | \$ 136 |
| Compensation expense arising from equity-settled share-based awards | 19 | 14 | 16 |
| Exercise of stock options and settlement of other equity-settled share-based awards | (43) | (20) | (27) |
| Other | 17 | (2) | - |
| Balance at end of year | **\$ 110** | **\$ 117** | **\$ 125** |
| **Retained earnings** | | | |
| Balance at beginning of year before accounting policy changes | n/a | \$ 20,972 | \$ 18,537 |
| Impact of adopting IFRS 15 at November 1, 2018 | n/a | n/a | 6 |
| Impact of adopting IFRS 16 at November 1, 2019 | n/a | 148 | n/a |
| Balance at beginning of year after accounting policy changes | \$ 22,119 | 21,120 | 18,543 |
| Net income attributable to equity shareholders | 6,429 | 3,790 | 5,096 |
| Dividends and distributions (Note 16) | | | |
| Preferred and other equity instruments | (158) | (122) | (111) |
| Common | (2,622) | (2,592) | (2,488) |
| Premium on purchase of common shares for cancellation | (166) | (79) | 27 |
| Realized gains (losses) on equity securities designated at FVOCI reclassified from AOCI | 27 | 93 | 18 |
| Other | (2) | (4) | (7) |
| Balance at end of year | **\$ 25,793** | **\$ 22,119** | **\$ 20,972** |
| **AOCI, net of income tax** | | | |
| **AOCI, net of income tax, that is subject to subsequent reclassification to net income** | | | |
| Net foreign currency translation adjustments | | | |
| Balance at beginning of year | \$ 1,173 | \$ 993 | \$ 1,024 |
| Net change in foreign currency translation adjustments | (1,115) | 180 | (31) |
| Balance at end of year | **\$ 58** | **\$ 1,173** | **\$ 993** |
| Net gains (losses) on debt securities measured at FVOCI | | | |
| Balance at beginning of year | \$ 309 | \$ 77 | \$ (139) |
| Net change in debt securities measured at FVOCI | (116) | 232 | 216 |
| Balance at end of year | **\$ 193** | **\$ 309** | **\$ 77** |
| Net gains (losses) on cash flow hedges | | | |
| Balance at beginning of year | \$ 274 | \$ 113 | \$ (18) |
| Net change in cash flow hedges | (137) | 161 | 131 |
| Balance at end of year | **\$ 137** | **\$ 274** | **\$ 113** |
| **AOCI, net of income tax, that is not subject to subsequent reclassification to net income** | | | |
| Net gains (losses) on post-employment defined benefit plans | | | |
| Balance at beginning of year | \$ (283) | \$ (363) | \$ (143) |
| Net change in post-employment defined benefit plans | 917 | 80 | (220) |
| Balance at end of year | **\$ 634** | **\$ (283)** | **\$ (363)** |
| Net gains (losses) due to fair value change of FVO liabilities attributable to changes in credit risk | | | |
| Balance at beginning of year | \$ (40) | \$ 16 | \$ (12) |
| Net change attributable to changes in credit risk | 12 | (56) | 28 |
| Balance at end of year | **\$ (28)** | **\$ (40)** | **\$ 16** |
| Net gains (losses) on equity securities designated at FVOCI | | | |
| Balance at beginning of year | \$ 2 | \$ 45 | \$ 65 |
| Net gains (losses) on equity securities designated at FVOCI | 100 | 50 | (2) |
| Realized gains (losses) on equity securities designated at FVOCI reclassified to retained earnings | (27) | (93) | (18) |
| Balance at end of year | **\$ 75** | **\$ 2** | **\$ 45** |
| **Total AOCI, net of income tax** | **1,069** | **1,435** | **881** |
| **Non-controlling interests** | | | |
| Balance at beginning of year | \$ 181 | \$ 186 | \$ 173 |
| Net income attributable to non-controlling interests | 17 | 2 | 25 |
| Dividends | (9) | (15) | (11) |
| Other | (7) | 8 | (1) |
| Balance at end of year | **\$ 182** | **\$ 181** | **\$ 186** |
| **Equity at end of year** | **\$ 45,830** | **\$ 41,335** | **\$ 38,580** |

n/a Not applicable.

The accompanying notes and shaded sections in "MD&A – Management of risk" are an integral part of these consolidated financial statements.

## Consolidated statement of cash flows

Millions of Canadian dollars, for the year ended October 31

| Cash flows provided by (used in) operating activities | 2021 | 2020 | 2019 |
|---|---|---|---|
| Net income | \$ 6,446 | \$ 3,792 | \$ 5,121 |
| Adjustments to reconcile net income to cash flows provided by (used in) operating activities: | | | |
| Provision for credit losses | 158 | 2,489 | 1,286 |
| Amortization and impairment (1) | 1,017 | 1,311 | 838 |
| Stock options and restricted shares expense | 19 | 14 | 16 |
| Deferred income taxes | (41) | (228) | 108 |
| Losses (gains) from debt securities measured at FVOCI and amortized cost | (90) | (228) | (34) |
| Net losses (gains) on disposal of property and equipment | 4 | (7) | (9) |
| Other non-cash items, net | 927 | (767) | (229) |
| Net changes in operating assets and liabilities | (3,437) | (5,468) | (208) |
| Interest-bearing deposits with banks | (46,883) | (18,891) | (17,653) |
| Loans, net of repayments | 47,521 | 82,120 | 19,838 |
| Deposits, net of withdrawals | 6,827 | 328 | 1,853 |
| Obligations related to securities sold short | 46 | 97 | (122) |
| Accrued interest receivable | (419) | (238) | 138 |
| Accrued interest payable | 3,172 | (8,832) | (2,484) |
| Derivative assets | 1,582 | 5,184 | 4,037 |
| Securities measured at FVTPL | (9,552) | (8,296) | (1,826) |
| Other assets and liabilities measured/designated at FVTPL | 7,277 | 1,563 | 1,222 |
| Current income taxes | 543 | 1,287 | (309) |
| Cash collateral on securities lent | 639 | 2 | (909) |
| Obligations related to securities sold under repurchase agreements | (2,248) | 19,852 | 20,961 |
| Cash collateral on securities borrowed | (3,821) | (4,883) | 1,824 |
| Securities purchased under resale agreements | (1,977) | (9,394) | (10,785) |
| Other, net (2) | (4,694) | (270) | (3,590) |
| **Cash flows provided by (used in) operating activities** | **(2,332)** | **60,767** | **19,086** |
| **Cash flows provided by (used in) financing activities** | | | |
| Issue of subordinated indebtedness | 1,000 | 1,000 | 1,500 |
| Redemption/repurchase/maturity of subordinated indebtedness | (1,008) | (33) | (1,001) |
| Issue of preferred shares and limited recourse capital notes, net of issuance cost | 748 | 747 | 568 |
| Issue of common shares for cash | 284 | 163 | 157 |
| Purchase of common shares for cancellation | (15) | (234) | (109) |
| Net sale (purchase) of treasury shares | 1 | (234) | 14 |
| Dividends and distributions paid | (2,649) | (2,571) | (2,406) |
| Repayment of lease liabilities | (305) | (307) | (1,945) |
| **Cash flows provided by (used in) investing activities** | **(49,896)** | **(54,075)** | **(42,304)** |
| Purchase of securities measured/designated at FVOCI and amortized cost | 23,917 | 11,883 | 13,764 |
| Proceeds from sale of securities measured/designated at FVOCI and amortized cost | 23,312 | 23,093 | 10,948 |
| Proceeds from maturity of debt securities measured at FVOCI and amortized cost | (25) |
| Cash used in acquisitions, net of cash acquired | (839) | (3,506) | (781) |
| Net sale (purchase) of property, equipment, software and other intangibles (2) | (19,880) | (18,340) |
| **Effect of exchange rate changes on cash and non-interest-bearing deposits with banks** | **(175)** | **25** | **4** |
| **Net increase (decrease) in cash and non-interest-bearing deposits with banks during the year** | **(8,958)** | **39,691** | **(540)** |
| Cash and non-interest-bearing deposits with banks at beginning of year | 43,531 | 3,840 | 4,380 |
| **Cash and non-interest-bearing deposits with banks at end of year (3)** | **\$ 34,573** | **\$ 43,531** | **\$ 3,840** |
| **Cash interest paid** | **\$ 3,701** | **\$ 6,716** | **\$ 10,008** |
| **Cash interest received** | **13,890** | **16,774** | **19,840** |
| **Cash dividends received** | **897** | **845** | **735** |
| **Cash income taxes paid** | **1,374** | **39** | **1,549** |

(1) Comprises amortization and impairment of buildings, right-of-use assets, furniture, equipment, leasehold improvements, software and other intangible assets, and goodwill.
(2) Certain information has been reclassified to conform to the presentation adopted in the current year.
(3) Includes restricted cash of $446 million (2020: $463 million; 2019: $479 million) and interest-bearing demand deposits with Bank of Canada.

The accompanying notes and shaded sections in "MD&A - Management of risk" are an integral part of these consolidated financial statements.

## Notes to the consolidated financial statements

Canadian Imperial Bank of Commerce (CIBC) is a diversified financial institution governed by the Bank Act (Canada). CIBC was formed through the amalgamation of the Canadian Bank of Commerce and Imperial Bank of Canada in 1961. Through our four strategic business units (SBUs) – Canadian Personal and Business Banking, Canadian Commercial Banking and Wealth Management, U.S. Commercial Banking and Wealth Management, and Capital Markets - CIBC provides a full range of financial products and services to 11 million personal banking, business, public sector and institutional clients in Canada, the U.S. and around the world. Refer to Note 31 for further details on our business units. CIBC is incorporated and domiciled in Canada, with our registered and principal business offices located at CIBC Square, Toronto, Ontario effective November 1, 2021.

### Note 1 Basis of preparation and summary of significant accounting policies

#### Basis of preparation

The consolidated financial statements of CIBC have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). These consolidated financial statements also comply with Section 308(4) of the Bank Act (Canada) and the requirements of the Office of the Superintendent of Financial Institutions (OSFI).

CIBC has consistently applied the same accounting policies throughout all periods presented, except for the adoption of the "Conceptual Framework for Financial Reporting" effective November 1, 2020, the adoption of "Interest Rate Benchmark Reform: Phase 2 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16" (the Phase 2 amendments) effective November 1, 2020, the adoption of "Interest Rate Benchmark Reform: Amendments to IFRS 9, IAS 39 and IFRS 7" (the Phase 1 amendments) effective November 1, 2019, the adoption of IFRS 16 "Leases" effective November 1, 2019, and the adoption of International Financial Reporting Interpretations Committee (IFRIC) 23 "Uncertainty over Income Tax Treatments" effective November 1, 2019, each of which were adopted without restatement of comparative periods as discussed below under the sections titled "Conceptual Framework for Financial Reporting (Conceptual Framework)", "Interest Rate Benchmark Reform", "Leases", and "International Financial Reporting Interpretations Committee 23: Uncertainty over Income Tax Treatments (IFRIC 23)".

These consolidated financial statements are presented in millions of Canadian dollars, unless otherwise indicated.

These consolidated financial statements were authorized for issue by the Board of Directors (the Board) on December 1, 2021.

#### Summary of significant accounting policies

The following paragraphs describe our significant accounting policies.

##### Use of estimates and assumptions

The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the recognized and measured amounts of assets, liabilities, net income, comprehensive income and related disclosures. Significant estimates and assumptions are made in the areas of the valuation of financial instruments, allowance for credit losses, the evaluation of whether to consolidate structured entities (SEs), asset impairment, income taxes, provisions and contingent liabilities, post-employment and other long-term benefit plan assumptions and the valuation of self-managed loyalty points programs. Actual results could differ from these estimates and assumptions.

##### Basis of consolidation

We consolidate entities over which we have control. We have control over another entity when we have: (i) power to direct relevant activities of the entity; (ii) exposure, or rights, to variable returns from our involvement with the entity; and (iii) the ability to affect those returns through our power over the entity.

###### Subsidiaries

Subsidiaries are entities over which CIBC has control. Generally, CIBC has control of its subsidiaries through a shareholding of more than 50% of the voting rights, and has significant exposure to the subsidiaries based on its ownership interests of more than 50%. The effects of potential voting rights that CIBC has the practical ability to exercise are considered when assessing whether control exists. Subsidiaries are consolidated from the date control is obtained by CIBC and are deconsolidated from the date control is lost. Consistent accounting policies are applied for all consolidated subsidiaries. Details of our significant subsidiaries are provided in Note 27.

###### Structured entities

A SE is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the significant relevant activities are directed by contractual arrangements. SEs often have some or all of the following features or attributes: (i) restricted activities; (ii) a narrow and well-defined objective, such as to securitize our own financial assets or third-party financial assets to provide sources of funding or to provide investment opportunities for investors by passing on risks and rewards associated with the assets of the SE to investors; (iii) insufficient equity to permit the SE to finance its activities without subordinated financial support; or (iv) financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks. Examples of SEs include securitization vehicles, asset-backed financings, and investment funds.

When voting rights are not relevant in deciding whether CIBC has power over an entity, particularly for complex SEs, the assessment of control considers all facts and circumstances, including the purpose and design of the investee, its relationship with other parties and each party's ability to make decisions over significant activities, and whether CIBC is acting as a principal or as an agent.

We do not have control over an investee when we are acting as the agent for a third-party. In assessing whether we are an agent we determine (i) the scope of our decision-making authority, (ii) the rights held by other parties, (iii) the remuneration to which we are entitled and (iv) our exposure to variability of returns from other interests that we hold in the investee.

Consolidation conclusions are reassessed whenever there is a change in the specific facts and circumstances relevant to one or more of the three elements of control. Factors that trigger the reassessment include, but are not limited to, significant changes in ownership structure of the entities, changes in contractual or governance arrangements, provision of a liquidity facility beyond the original terms, transactions with the entities that were not contemplated originally and changes in the financing structure of the entities.

##### Transactions eliminated on consolidation

All intercompany transactions, balances and unrealized gains and losses on transactions are eliminated on consolidation.

##### Non-controlling interests

Non-controlling interests are presented on the consolidated balance sheet as a separate component of equity that is distinct from CIBC's shareholders' equity. The net income attributable to non-controlling interests is presented separately in the consolidated statement of income.

##### Associates and joint ventures

We classify investments in entities over which we have significant influence, and that are neither subsidiaries nor joint ventures, as associates. Significant influence is presumed to exist where we hold, either directly or indirectly, between 20% and 50% of the voting rights of an entity, or, in the case of a limited partnership, where CIBC is a co-general partner. Significant influence also may exist where we hold less than 20% of the voting rights of an entity, for example if we have influence over policy-making processes through representation on the entity's Board of Directors, or by other means. Where we are a party to a contractual arrangement whereby we undertake an economic activity that is subject to joint control together with one or more parties, we classify our interest in the venture as a joint venture.

Investments in associates and interests in joint ventures are accounted for using the equity method. Under the equity method, such investments are initially measured at cost, including attributable goodwill and intangible assets, and are adjusted thereafter for the post-acquisition change in our share of the net assets of the investment.

In applying the equity method for an investment that has a different reporting period from that of CIBC, adjustments are made for the effects of any significant events or transactions that occur between the reporting date of the investment and CIBC's reporting date.

##### Foreign currency translation

Monetary assets and liabilities and non-monetary assets and liabilities measured at fair value that are denominated in foreign currencies are translated into the functional currencies of operations at prevailing exchange rates at the date of the consolidated balance sheet. Revenue and expenses are translated using average monthly exchange rates. Realized and unrealized gains and losses arising from translation into functional currencies are included in the consolidated statement of income, with the exception of unrealized foreign exchange gains and losses on FVOCI equity securities, which are included in AOCI.

Assets and liabilities of foreign operations with a functional currency other than the Canadian dollar, including goodwill and fair value adjustments arising on acquisition, are translated into Canadian dollars at the exchange rates prevailing as at the consolidated balance sheet date, while revenue and expenses of these foreign operations are translated into Canadian dollars at the average monthly exchange rates. Exchange gains and losses arising from the translation of these foreign operations and from the results of hedging the net investment in these foreign operations, net of applicable taxes, are included in Net foreign currency translation adjustments, in AOCI.

Any accumulated exchange gains and losses, including the impact of hedging, and any applicable taxes in AOCI are reclassified into the consolidated statement of income when there is a disposal of a foreign operation, including a partial disposal of a foreign operation that involves the loss of control. On partial disposal of a foreign operation that does not involve the loss of control, the proportionate share of the accumulated exchange gains and losses, including the impact of hedging, and any applicable taxes previously recognized in AOCI are reclassified into the consolidated statement of income.

##### Accounting for financial instruments

###### Classification and measurement of financial instruments

All financial assets must be classified at initial recognition as financial instruments mandatorily measured at FVTPL (trading and non-trading), financial instruments measured at amortized cost, debt financial instruments measured at FVOCI, equity financial instruments designated at FVOCI, or financial instruments designated at FVTPL (fair value option), based on the contractual cash flow characteristics of the financial assets and the business model under which the financial assets are managed. All financial assets and derivatives are required to be measured at fair value with the exception of financial assets measured at amortized cost. Financial assets are required to be reclassified when and only when the business model under which they are managed has changed. All reclassifications are to be applied prospectively from the reclassification date.

The classification and measurement model requires that all debt instrument financial assets that do not meet a "solely payment of principal and interest" (SPPI) test, including those that contain embedded derivatives, be classified at initial recognition as FVTPL. The SPPI test is conducted to identify whether the contractual cash flows of a financial instrument are "solely payments of principal and interest" such that any variability in the contractual cash flows is consistent with a "basic lending arrangement". "Principal" for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset, for example, due to repayments of principal or amortization of the premium/discount. "Interest" for the purpose of this test is defined as the consideration for the time value of money and credit risk, which are the most significant elements of interest within a lending arrangement. Contractual terms that introduce a more than de minimis exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. The intent of the SPPI test is to ensure that debt instruments that contain non-basic lending features, such as conversion options and equity-linked payouts, are measured at FVTPL.

For debt instrument financial assets that meet the SPPI test, classification at initial recognition is determined based on the business model under which these instruments are managed. Debt instruments that are managed on a "held for trading" or "fair value" basis are classified as FVTPL. Debt instruments that are managed on a "hold to collect and for sale" basis are classified as FVOCI for debt. Debt instruments that are managed on a "hold to collect" basis are classified as amortized cost. We consider the following in our determination of the applicable business model for financial assets:
i) The business purpose of the portfolio;
ii) The risks that are being managed and the type of business activities that are being carried out on a day-to-day basis to manage the risks;
iii) The basis on which performance of the portfolio is being evaluated; and
iv) The frequency and significance of sales activity.

All equity instrument financial assets are classified at initial recognition as FVTPL unless they are not held with the intent for short-term profit-taking and an irrevocable designation is made to classify the instrument as FVOCI for equities.

Financial liabilities, other than derivatives, obligations related to securities sold short and FVO liabilities, are measured at amortized cost. Derivatives, obligations related to securities sold short and FVO financial liabilities are measured at fair value.

Derivatives are measured at FVTPL, except to the extent that they are designated in a hedging relationship, in which case the International Accounting Standard (IAS) 39 "Financial Instruments: Recognition and Measurement" (IAS 39) hedge accounting requirements continue to apply.

###### Financial instruments mandatorily measured at FVTPL (trading and non-trading)

Trading financial instruments are mandatorily measured at FVTPL as they are held for trading purposes or are part of a managed portfolio with a pattern of short-term profit-taking. Non-trading financial assets are also mandatorily measured at fair value if their contractual cash flow characteristics do not meet the SPPI test or if they are managed together with other financial instruments on a fair value basis.

Trading and non-trading financial instruments mandatorily measured at FVTPL are remeasured at fair value as at the consolidated balance sheet date. Gains and losses realized on disposition and unrealized gains and losses from changes in fair value are included in Non-interest income as Gains (losses) from financial instruments measured/designated at FVTPL, net. Interest income and dividends earned on trading and non-trading securities and dividends and interest expense incurred on securities sold short are included in Interest income and Interest expense, respectively.

###### Financial instruments designated at FVTPL (fair value option)

Financial instruments designated at FVTPL are those that we voluntarily designate at initial recognition as instruments that we will measure at fair value through the consolidated statement of income that would otherwise fall into a different accounting category. The FVO designation, once made, is irrevocable and can only be applied if reliable fair values are available, when doing so eliminates or significantly reduces the measurement inconsistency that would otherwise arise from measuring assets or liabilities on a different basis and if certain OSFI requirements pertaining to certain loans are met. Financial liabilities may also be designated at FVTPL when they are part of a portfolio which is managed on a fair value basis, in accordance with our investment strategy, and are reported internally on that basis. Designation at FVTPL may also be applied to financial liabilities that have one or more embedded derivatives that would otherwise require bifurcation. We apply the FVO to certain mortgage commitments.

Gains and losses realized on dispositions and unrealized gains and losses from changes in the fair value of FVO financial instruments are treated in the same manner as financial instruments which are mandatorily measured at FVTPL, except that changes in the fair value of FVO liabilities that are attributable to changes in own credit risk are recognized in OCI. Dividends and interest earned and interest expense incurred on FVO assets and liabilities are included in Interest income and Interest expense, respectively.

###### Financial assets measured at amortized cost

Financial assets measured at amortized cost are debt financial instruments with contractual cash flows that meet the SPPI test and are managed on a "hold to collect" basis. These financial assets are recognized initially at fair value plus or minus direct and incremental transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method, net of an allowance for expected credit losses (ECL).

Loans measured at amortized cost include residential mortgages, personal loans, credit cards and most business and government loans. Certain portfolios of treasury securities that are managed on a "hold to collect" basis are also classified as amortized cost. Most deposits with banks, securities purchased under resale agreements, cash collateral on securities borrowed and most customers' liability under acceptances are accounted for at amortized cost.

###### Debt financial assets measured at FVOCI

Debt financial instruments measured at FVOCI are non-derivative financial assets with contractual cash flows that meet the SPPI test and are managed on a "hold to collect and for sale" basis.

FVOCI debt instruments are measured initially at fair value, plus direct and incremental transaction costs. Subsequent to initial recognition, FVOCI debt instruments are remeasured at fair value, with the exception that changes in ECL allowances in addition to related foreign exchange gains or losses are recognized in the consolidated statement of income. Cumulative gains and losses previously recognized in OCI are transferred from AOCI to the consolidated statement of income when the debt instrument is sold. Realized gains and losses on sale, determined on an average cost basis, and changes in ECL allowances, are included in Gains (losses) from debt securities measured at FVOCI and amortized cost, net in the consolidated statement of income. Interest income from FVOCI debt instruments is included in Interest income. FVOCI debt instruments include our treasury securities which are managed on a "hold to collect and for sale" basis.

A debt financial instrument is classified as impaired (stage 3) when one or more events that have a detrimental impact on the estimated future cash flows of that financial instrument have occurred after its initial recognition. Evidence of impairment includes indications that the borrower is experiencing significant financial difficulty, or a default or delinquency has occurred.

###### Equity financial instruments designated at FVOCI

Equity financial instruments are measured at FVTPL unless an irrevocable designation is made to measure them at FVOCI. Gains or losses from changes in the fair value of equity instruments designated at FVOCI, including any related foreign exchange gains or losses, are recognized in OCI. Amounts recognized in OCI will not be subsequently recycled to profit or loss, with the exception of dividends that are not considered a return of capital, which are recognized as interest income when received in the consolidated statement of income. Instead, cumulative gains or losses upon derecognition of the equity instrument will be transferred within equity from AOCI to retained earnings and presented in Realized gains (losses) on equity securities designated at FVOCI reclassified to retained earnings in the consolidated statement of changes in equity. Financial assets designated as FVOCI include non-trading equity securities, primarily related to our investment in private companies and limited partnerships.

##### Impairment of financial assets

ECL allowances are recognized on all financial assets that are debt instruments classified either as amortized cost or FVOCI and for all loan commitments and financial guarantees that are not measured at FVTPL. ECL allowances represent credit losses that reflect an unbiased and probability-weighted amount which is determined by evaluating a range of possible outcomes, the time value of money and reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. Forward-looking information is explicitly incorporated into the estimation of ECL allowances, which involves significant judgment (see Note 6 for additional details).

ECL allowances for loans and acceptances are included in Allowance for credit losses on the consolidated balance sheet. ECL allowances for FVOCI debt securities are included as a component of the carrying value of the securities, which are measured at fair value. ECL allowances for other financial assets are included in the carrying value of the instrument. ECL allowances for guarantees and loan commitments are included in Other liabilities.

ECL allowances are measured at amounts equal to either: (i) 12-month ECL; or (ii) lifetime ECL for those financial instruments which have experienced a significant increase in credit risk since initial recognition or when there is objective evidence of impairment.

The calculation of ECL allowances is based on the expected value of three probability-weighted scenarios to measure the expected cash shortfalls, discounted at the effective interest rate. A cash shortfall is the difference between the contractual cash flows that are due and the cash flows that we expect to receive. The key inputs in the measurement of ECL allowances are as follows:
* The probability of default (PD) is an estimate of the likelihood of default over a given time horizon;
* The loss given default (LGD) is an estimate of the loss arising in the case where a default occurs at a given time; and
* The exposure at default (EAD) is an estimate of the exposure at a future default date.

Lifetime ECL is the expected credit losses that result from all possible default events over the expected life of a financial instrument. 12-month ECL is the portion of lifetime expected credit losses that represent the expected credit losses that result from default events on the financial instrument that are possible within the 12 months after the reporting date.

###### Stage migration and significant increase in credit risk

As a result of the requirements above, financial instruments subject to ECL allowances are categorized into three stages.

For performing financial instruments:
* Stage 1 is comprised of all performing financial instruments which have not experienced a significant increase in credit risk since initial recognition. We recognize 12 months of ECL for stage 1 financial instruments. In assessing whether credit risk has increased significantly, we compare the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of its initial recognition.
* Stage 2 is comprised of all performing financial instruments which have experienced a significant increase in credit risk since initial recognition. We recognize lifetime ECL for stage 2 financial instruments. In subsequent reporting periods, if the credit risk of the financial instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then we revert to recognizing 12 months of ECL as the financial instrument has migrated back to stage 1.

We determine whether a financial instrument has experienced a significant increase in credit risk since its initial recognition on an individual financial instrument basis. Changes in the required ECL allowance, including the impact of financial instruments migrating between stage 1 and stage 2, are recorded in Provision for credit losses in the consolidated statement of income. Significant judgment is required in the application of significant increase in credit risk (see Note 6 for additional details).

* Stage 3 financial instruments are those that we have classified as impaired. We recognize lifetime ECL for all stage 3 financial instruments. We classify a financial instrument as impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial instrument have occurred after its initial recognition. Evidence of impairment includes indications that the borrower is experiencing significant financial difficulties, or a default or delinquency has occurred. All financial instruments on which repayment of principal or payment of interest is contractually 90 days in arrears are automatically considered impaired, except for credit card loans, which are classified as impaired and are fully written off when payments are contractually 180 days in arrears or at the earlier of the notice of bankruptcy, settlement proposal, or enlistment of credit counselling services.

A financial instrument is no longer considered impaired when all past due amounts, including interest, have been recovered, and it is determined that the principal and interest are fully collectable in accordance with the original contractual terms or revised market terms of the financial instrument with all criteria for the impaired classification having been remedied.

Financial instruments are written off, either partially or in full, against the related allowance for credit losses when we judge that there is no realistic prospect of future recovery in respect of those amounts. When financial instruments are secured, this is generally after all collateral has been realized or transferred to CIBC, or in certain circumstances, when the net realizable value of any collateral and other available information suggests that there is no reasonable expectation of further recovery. In subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses.

###### Purchased loans

Both purchased performing and purchased credit-impaired loans are initially measured at their acquisition date fair values. As a result of recording these loans at fair value, no allowance for credit losses is recognized in the purchase equation at the acquisition date. Fair value is determined by estimating the principal and interest cash flows expected to be collected and discounting those cash flows at a market rate of interest. At the acquisition date, we classify a loan as performing where we expect timely collection of all amounts in accordance with the original contractual terms of the loan and as credit-impaired where it is probable that we will not be able to collect all contractually required payments.

For purchased performing loans, the acquisition date fair value adjustment on each loan is amortized to interest income over the expected remaining life of the loan using the effective interest rate method. The remaining unamortized amounts relating to those loans are recorded in income in the period that the loan is repaid. ECL allowances are established in Provision for credit losses in the consolidated statement of income immediately after the acquisition date based on classifying each loan in stage 1, since the acquisition date is established as the initial recognition date of purchased performing loans for the purpose of assessing whether a significant increase in credit risk has occurred. Subsequent to the acquisition date, ECL allowances are estimated in a manner consistent with our significant increase in credit risk and impairment policies that we apply to loans that we originate.

For purchased credit-impaired loans, the acquisition date fair value adjustment on each loan consists of management's estimate of the shortfall of principal and interest cash flows expected to be collected and the time value of money. The time value of money component of the fair value adjustment is amortized to interest income over the expected remaining life of the loan using the effective interest rate method. Subsequent to the acquisition date, we regularly re-estimate the expected cash flows for purchased credit-impaired loans. Decreases in the expected cash flows will result in an increase in our ECL allowance. Increases in the expected cash flows will result in a recovery of the ECL allowance. ECL allowances for purchased credit-impaired loans are reported in stage 3.

###### Originated credit-impaired financial assets

The accounting for originated credit-impaired financial assets operates in a similar manner to the accounting for purchased credit-impaired loans in that originated credit-impaired assets are initially recognized at fair value with no initial ECL allowance as concerns about the collection of future cash flows are instead reflected in the origination date discount. The time value of money component of the discount is amortized to interest income over the expected remaining life of the financial asset using the effective interest rate method. Changes in expectation regarding the contractual

cash flows for loans are recognized immediately in Provision for credit losses and for securities are recognized in Gains (losses) from debt securities measured at FVOCI and amortized cost, net.

This accounting generally applies to financial assets that result from debt restructuring arrangements in which a previously impaired financial asset is exchanged for a new financial asset that is either recognized at a fair value that represents a deep discount to par or for which there are significant concerns over the ability to collect the contractual cash flows.

###### Determination of fair value

Fair value is the price that would be received to sell an asset, or paid to transfer a liability, between market participants in an orderly transaction in the principal market at the measurement date under current market conditions (i.e., the exit price). Fair value measurements are categorized into three levels within a fair value hierarchy (Level 1, 2 or 3) based upon the market observability of the valuation inputs used in measuring the fair value. See Note 3 for more details about fair value measurement subsequent to initial recognition by type of financial instrument.

###### Transaction costs

Transaction costs relating to financial instruments mandatorily measured or designated at FVTPL are expensed as incurred. Transaction costs are amortized over the expected life of the instrument using the effective interest rate method for instruments measured at amortized cost, and debt instruments measured at FVOCI. For equity instruments designated at FVOCI, transaction costs are included in the instrument's carrying value.

###### Date of recognition of securities

We account for all securities transactions on our consolidated balance sheet using settlement date accounting.

###### Effective interest rate

Interest income and expense for all financial instruments measured at amortized cost and for debt securities measured at FVOCI are recognized in Interest income and Interest expense using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument to the net carrying value of the financial asset or liability upon initial recognition. When calculating the effective interest rate, we estimate future cash flows considering all contractual terms of the financial instrument, but not future credit losses.

Fees relating to loan origination, including commitment, restructuring and renegotiation fees, are considered an integral part of the yield earned on the loan and are accounted for using the effective interest rate method. Fees received for commitments that are not expected to result in a loan are included in Non-interest income over the commitment period. Loan syndication fees are included in Non-interest income on completion of the syndication arrangement, provided that the yield on the portion of the loan we retain is at least equal to the average yield earned by the other lenders involved in the financing; otherwise, an appropriate portion of the fee is deferred as unearned income and amortized to interest income using the effective interest rate method.

Interest income is recognized on stage 1 and stage 2 financial assets measured at amortized cost by applying the effective interest rate to the gross carrying amount of the financial instrument. For stage 3 financial instruments, interest income is recognized using the rate of interest used to discount the estimated future cash flows for the purpose of measuring the impairment loss and applied to the net carrying value of the financial instrument.

##### Securitizations and derecognition of financial assets

Securitization of our own assets provides us with an additional source of liquidity. As we generally retain substantially all of the risks and rewards of the transferred assets, assets remain on the consolidated balance sheet and funding from these transactions is accounted for as Deposits - secured borrowings.

Securitizations to non-consolidated SEs are accounted for as sales, with the related assets being derecognized, only where:
* Our contractual right to receive cash flows from the assets has expired;
* We transfer our contractual rights to receive the cash flows of the financial asset, and have: (i) transferred substantially all the risks and rewards of ownership, or (ii) neither retained nor transferred substantially all the risks and rewards, but have not retained control; or
* The transfer meets the criteria of a qualifying pass-through arrangement.

##### Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. If an existing financial liability is replaced by another liability from the same lender on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference in the respective carrying values is recognized in the consolidated statement of income. The repurchase of a debt instrument is considered an extinguishment of that debt instrument even if we intend to resell the instrument in the near term.

##### Financial guarantees

Financial guarantees are financial contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts issued by CIBC that are not classified as insurance contracts are initially recognized as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantees, which is generally the premium received or receivable on the date the guarantee was given. Subsequently, financial guarantee liabilities are measured at the higher of the initial fair value, less cumulative amortization, and the applicable ECL allowances. A financial guarantee that qualifies as a derivative is remeasured at fair value as at each reporting date and reported as Derivative instruments in assets or liabilities, as appropriate.

##### Mortgage commitments

Mortgage interest rate commitments are extended to our retail clients in contemplation of borrowing to finance the purchase of homes under mortgages to be funded by CIBC in the future. These commitments are usually for periods of up to 120 days and generally entitle the borrower to receive funding at the lower of the interest rate at the time of the commitment and the rate applicable at the funding date. We use financial instruments, such as interest rate derivatives, to economically hedge our exposure to an increase in interest rates. Based on our estimate of the commitments expected to be exercised, a financial liability would be recognized on our consolidated balance sheet, to which we apply the FVO. We also carry the associated economic hedges at fair value on the consolidated balance sheet. Changes in the fair value of the FVO commitment liability and the associated economic hedges are included in Gains (losses) from financial instruments measured/designated at FVTPL, net. In addition, since the fair value of the commitments is priced into the mortgage, the difference between the mortgage amount and its fair value at funding is recognized in the consolidated statement of income to offset the carrying value of the mortgage commitment that is released upon its expiry.

##### Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset, and the amount presented net, when we have a legally enforceable right to set off the recognized amounts and intend to settle on a net basis or to realize the asset and settle the liability simultaneously.

##### Acceptances and customers' liability under acceptances

Acceptances constitute a liability of CIBC on negotiable instruments issued to third parties by our customers. We earn a fee for guaranteeing and then making the payment to the third parties. The amounts owed to us by our customers in respect of these guaranteed amounts are reflected in assets as Customers' liability under acceptances.

##### Securities purchased under resale agreements and obligations related to securities sold under repurchase agreements

Securities purchased under resale agreements are treated as collateralized lending transactions as they represent the purchase of securities affected with a simultaneous agreement to sell them back at a future date at a fixed price, which is generally near term. These transactions are classified and measured at amortized cost, as they meet the SPPI criteria and are managed under a hold to collect business model, unless they were classified at FVTPL or designated under the FVO. For Securities purchased under resale agreements that are classified at amortized cost, an ECL is applied. Interest income is accrued using the effective interest rate method and is included in Interest income - Securities borrowed or purchased under resale agreements in the consolidated statement of income.

Similarly, securities sold under agreements to repurchase are treated as collateralized borrowing transactions at amortized cost with interest expense accrued using the effective interest rate method and are included in Interest expense - Securities lent or sold under repurchase agreements in the consolidated statement of income. Certain obligations related to securities sold under repurchase agreements are designated at FVTPL under the FVO.

##### Cash collateral on securities borrowed and securities lent

The right to receive back cash collateral paid and the obligation to return cash collateral received on borrowing and lending of securities, which is generally near term, is recognized as cash collateral on securities borrowed and securities lent, respectively. These transactions are classified and measured at amortized cost as they meet the SPPI criteria and are managed under a hold to collect business model. For Cash collateral on securities borrowed classified at amortized cost, an ECL is applied. Interest income on cash collateral paid and interest expense on cash collateral received together with the security borrowing fees and security lending income are included in Interest income - Securities borrowed or purchased under resale agreements and Interest expense - Securities lent or sold under repurchase agreements, respectively. For securities borrowing and lending transactions where securities are pledged or received as collateral, securities pledged by CIBC remain on the consolidated balance sheet and securities received by CIBC are not recognized on the consolidated balance sheet.

##### Derivatives

We use derivative instruments for both asset/liability management (ALM) and trading purposes. The derivatives used for ALM purposes allow us to manage financial risks, such as movements in interest and foreign exchange rates, while our derivative trading activities are primarily driven by client activities. We may also take proprietary trading positions within prescribed risk limits with the objective of earning income.

All derivative instruments are recognized initially, and are measured subsequently, at fair value and are reported as assets where they have a positive fair value and as liabilities where they have a negative fair value, in both cases as derivative instruments. Any realized and unrealized gains or losses on derivatives used for trading purposes are recognized immediately in Gains (losses) from financial instruments measured/designated at FVTPL, net. The accounting for derivatives used for ALM purposes depends on whether they qualify for hedge accounting as discussed below.

Fair values of exchange-traded derivatives are based on quoted market prices. Fair values of over-the-counter (OTC) derivatives, including OTC derivatives that are centrally cleared, are obtained using valuation techniques, including discounted cash flow models and option pricing models. See Note 13 for further information on the valuation of derivatives.

###### Derivatives used for ALM purposes that qualify for hedge accounting

As permitted at the time of transition to IFRS 9 "Financial Instruments" (IFRS 9), we previously elected to continue to apply the hedge accounting requirements of IAS 39. We adopted the Phase 1 and Phase 2 amendments to IAS 39, together with the associated IFRS 7 "Financial Instruments: Disclosures" (IFRS 7) disclosure requirements, relating to interest rate benchmark reform for hedge accounting relationships impacted by the reform. See the "Interest Rate Benchmark Reform" section below for further detail.

We apply hedge accounting for derivatives held for ALM purposes that meet specified criteria. There are three types of hedges: fair value, cash flow and hedges of net investments in foreign operations (NIFOs). When hedge accounting is not applied, the change in the fair value of the derivative is recognized in the consolidated statement of income (see "Derivatives used for ALM purposes that are not designated for hedge accounting" below).

In order for derivatives to qualify for hedge accounting, the hedge relationship must be designated and formally documented at its inception in accordance with IAS 39. The particular risk management objective and strategy, the specific asset, liability or cash flow being hedged, as well as how hedge effectiveness is assessed, are documented. Hedge effectiveness requires a high correlation of changes in fair values or cash flows between the hedged and hedging items.

We assess the effectiveness of derivatives in hedging relationships, both at inception and on an ongoing basis. Ineffectiveness results to the extent that the change in the fair value of the hedging derivative differs from the change in the fair value of the hedged risk in the hedged item, or the cumulative change in the fair value of the hedging derivative exceeds the cumulative change in the fair value of expected future cash flows of the hedged item. The amount of ineffectiveness of hedging instruments is recognized immediately in the consolidated statement of income.

###### Fair value hedges

We designate fair value hedges primarily as part of interest rate risk management strategies that use derivatives to hedge changes in the fair value of financial instruments with fixed interest rates. Changes in fair value attributed to the hedged interest rate risk are accounted for as basis adjustments to the hedged financial instruments and are included in Net interest income. Changes in fair value from the hedging derivatives are also included in Net interest income. Any differences between the two represent hedge ineffectiveness that is included in Net interest income.

Similarly, for hedges of foreign exchange risk, changes in the fair value from the hedging derivatives and non-derivatives are included in FXOTT. Changes in the fair value of the hedged item from the hedged foreign exchange risk are accounted for as basis adjustments and are also included in FXOTT. Any difference between the two represents hedge ineffectiveness.

If the hedging instrument expires or is sold, terminated or exercised, or where the hedge no longer meets the criteria for hedge accounting, the hedge relationship is terminated and the basis adjustment applied to the hedged item is amortized over the remaining term of the hedged item. If the hedged item is derecognized, the unamortized basis adjustment is recognized immediately in the consolidated statement of income.

###### Cash flow hedges

We designate cash flow hedges as part of interest rate risk management strategies that use derivatives to mitigate our risk from variable cash flows by effectively converting certain variable-rate financial instruments to fixed-rate financial instruments, and as part of foreign exchange rate risk management strategies to hedge forecasted foreign currency denominated cash flows. We also designate cash flow hedges to hedge changes in CIBC's share price in respect of certain cash-settled share-based payment awards.

The effective portion of the change in fair value of the derivative instrument is recognized in OCI until the variability in cash flows being hedged is recognized in the consolidated statement of income in future accounting periods, at which time an appropriate portion of the amount that was in AOCI is reclassified into the consolidated statement of income. The ineffective portion of the change in fair value of the hedging derivative is included in Net interest income, FXOTT, or Non-interest expenses immediately as it arises.

If the hedging instrument expires or is sold, terminated or exercised, or where the hedge no longer meets the criteria for hedge accounting, the hedge relationship is terminated. Upon termination of the hedge relationship, any remaining amount in AOCI remains therein until it is recognized in the consolidated statement of income when the variability in cash flows hedged or the hedged forecast transaction is ultimately recognized in the consolidated statement of income. When the forecasted transaction is no longer expected to occur, the related cumulative gain or loss in AOCI is recognized immediately in the consolidated statement of income.

###### Hedges of NIFOs with a functional currency other than the Canadian dollar

We may designate NIFO hedges to mitigate the foreign exchange risk on our NIFOs with a functional currency other than the Canadian dollar. These hedges are accounted for in a similar manner to cash flow hedges. The change in fair value of the hedging instrument relating to the effective portion is recognized in OCI. The change in fair value of the hedging instrument attributable to the forward points and relating to the ineffective portion is recognized immediately in FXOTT. Gains and losses in AOCI are reclassified to the consolidated statement of income upon the disposal or partial disposal of the investment in the foreign operation that involves the loss of control, as explained in the "Foreign currency translation" policy above.

###### Derivatives used for ALM purposes that are not designated for hedge accounting

The change in fair value of the derivatives not designated as accounting hedges but used to economically hedge FVO assets or liabilities is included in Gains (losses) from financial instruments measured/designated at FVTPL, net. The change in fair value of other derivatives not designated as accounting hedges but used for other economic hedging purposes is included in Non-interest income as FXOTT or Other, as appropriate, or in the case of economic hedges of cash-settled share-based payment obligations, in compensation expense.

###### Embedded derivatives

Derivatives embedded in financial liabilities are accounted for as separate derivatives when their economic characteristics and risks are not closely related to those of the host instrument and the terms of the embedded derivative represent those of a freestanding derivative in situations where the combined instrument is not classified as FVTPL or FVO. These embedded derivatives, which are classified together with the host instrument on the consolidated balance sheet, are measured at fair value, with changes therein included in the consolidated statement of income. The residual amount of the host liability is accreted to its maturity value through Interest income and Interest expense, respectively, using the effective interest rate method.

Gains at inception on derivatives embedded in financial instruments bifurcated for accounting purposes are not recognized at inception; instead they are recognized over the life of the residual host instrument. Where an embedded derivative is separable from the host instrument but the fair value, as at the acquisition or reporting date, cannot be reliably measured separately or is otherwise not bifurcated, the entire combined contract is measured at FVTPL.

Financial assets with embedded derivatives are classified in their entirety into the appropriate classification at initial recognition through an assessment of the contractual cash flow characteristics of the asset and the business model under which it is managed.

##### Accumulated other comprehensive income

AOCI is included on the consolidated balance sheet as a separate component of total equity, net of income tax. It includes net unrealized gains and losses on FVOCI debt and equity securities, the effective portion of gains and losses on derivative instruments designated within effective cash flow hedges under IAS 39, unrealized foreign currency translation gains and losses on foreign operations with a functional currency other than the Canadian dollar net of gains or losses on related hedges, net gains (losses) related to fair value changes of FVO liabilities attributable to changes in own credit risk, and net gains (losses) on post-employment defined benefit plans.

##### Treasury shares

Where we repurchase our own equity instruments, these instruments are treated as treasury shares and are deducted from equity at their cost with any gain or loss recognized in Contributed surplus or Retained earnings as appropriate. No gain or loss is recognized in the consolidated statement of income on the purchase, sale, issue or cancellation of our own equity instruments. Any difference between the carrying value and the consideration, if reissued, is also included in Contributed surplus.

##### Liabilities and equity

We classify financial instruments as a liability or equity based on the substance of the contractual arrangement. An instrument is classified as a liability if it is a contractual obligation to deliver cash or another financial asset, or to exchange financial assets or financial liabilities at potentially unfavourable terms. A contract is also classified as a liability if it is a non-derivative and could obligate us to deliver a variable number of our own shares or it is a derivative other than one that can be settled by the delivery of a fixed amount of cash or another financial asset for a fixed number of our own equity instruments. An instrument is classified as equity if it evidences a residual interest in our assets after deducting all liabilities. The components of a compound financial instrument are classified and accounted for separately as assets, liabilities, or equity as appropriate. Incremental costs directly attributable to the issuance of equity instruments are shown in equity, net of income tax.

### Note 2 Property and equipment

| $ millions, as at or for the year ended October 31 | Right-ofuse assets (1) | Land and buildings | Computer equipment | Office furniture, equipment and other (2) | Leasehold improvements (2) | Total |
|---|---|---|---|---|---|---|
| **2021** | | | | | | |
| Cost | | | | | | |
| Balance at beginning of year | \$ 1,790 | \$ 681 | \$ 1,109 | \$ 1,129 | \$ 1,178 | \$ 5,887 |
| Additions (3) | 607 | 33 | 65 | 167 | 872 |
| Disposals (4) | (61) | (3) | (28) | | |
| Adjustments (5) | (33) | (8) | (11) | (131) | (29) | (82) |
| Balance at end of year | **\$ 2,303** | **\$ 703** | **\$ 1,135** | **\$ 982** | **\$ 1,302** | **\$ 6,425** |
| **2020** | | | | | | |
| Balance at end of year | \$ 1,790 | \$ 681 | \$ 1,109 | \$ 1,129 | \$ 1,178 | \$ 5,887 |
| **2021** | | | | | | |
| Accumulated depreciation | | | | | | |
| Balance at beginning of year | \$ 316 | \$ 305 | \$ 869 | \$ 553 | \$ 847 | \$ 2,890 |
| Depreciation (4) | 301 | 15 | 102 | 48 | 64 | 530 |
| Disposals (4) | (55) | (4) | (38) | (120) | (22) | (239) |
| Adjustments (5) | (12) | (3) | (10) | (9) | (8) | (42) |
| Balance at end of year | **\$ 550** | **\$ 313** | **\$ 923** | **\$ 472** | **\$ 881** | **\$ 3,139** |
| **2020** | | | | | | |
| Balance at end of year | \$ 316 | \$ 305 | \$ 869 | \$ 553 | \$ 847 | \$ 2,890 |
| **Net book value** | | | | | | |
| As at October 31, 2021 | \$ 1,753 | \$ 390 | \$ 212 | \$ 510 | \$ 421 | \$ 3,286 |
| As at October 31, 2020 | \$ 1,474 | \$ 376 | \$ 240 | \$ 576 | \$ 331 | \$ 2,997 |

(1) Includes right-of-use assets with a net book value of $49 million as at November 1, 2019 that were rented out through operating sublease arrangements.
(2) Includes $234 million (2020: $306 million) of work-in-progress not subject to depreciation.
(3) Includes impact of lease modifications.
(4) Includes write-offs for properties that were vacated in the fourth quarter of 2021, and write-offs of fully depreciated assets.
(5) Includes foreign currency translation adjustments.

Cost of net additions and disposals during the year was: Canadian Personal and Business Banking net disposals of $70 million (2020: net additions of $860 million); Canadian Commercial Banking and Wealth Management net disposals of $5 million (2020: nil); U.S. Commercial Banking and Wealth Management net additions of $31 million (2020: net additions of $219 million); Capital Markets net additions of $20 million (2020: net additions of $166 million); and Corporate and Other net additions of $644 million (2020: net disposals of $17 million).

### Note 9 Goodwill, software and other intangible assets

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets, liabilities and contingent liabilities acquired in business combinations. Identifiable intangible assets are recognized separately from goodwill when they are separable or arise from contractual or other legal rights, and have fair values that can be reliably measured.

Goodwill is not amortized, but is subject to impairment review at least annually or more frequently if there are indicators that the goodwill may be impaired. Refer to the "Impairment of non-financial assets" policy below.

Intangible assets represent software and customer relationships, core deposit intangibles, investment management contracts, and brand names recognized as part of past acquisitions. Intangible assets with definite useful lives are measured at cost less accumulated amortization and accumulated impairment losses. Intangible assets with indefinite useful lives are measured at cost less any accumulated impairment losses.

| $ millions, as at or for the year ended October 31 | CGUs | | | | |
|---|---|---|---|---|---|
| | CIBC FirstCaribbean | Canadian Commercial Banking and Wealth Management | U.S. Commercial Banking and Wealth Management | Other | Total |
| **2021** | | | | | |
| Balance at beginning of year | \$ 35 | \$ 884 | \$ 4,131 | \$ 203 | \$ 5,253 |
| Foreign currency translation adjustments | (3) | - | (293) | - | (296) |
| Balance at end of year | **\$ 32** | **\$ 884** | **\$ 3,838** | **\$ 203** | **\$ 4,954** |
| **2020** | | | | | |
| Balance at beginning of year | \$ 278 | \$ 884 | \$ 4,084 | \$ 203 | \$ 5,449 |
| Impairment | (248) | - | (47) | - | (295) |
| Foreign currency translation adjustments | 5 | - | 1 | - | 6 |
| Balance at end of year | **\$ 35** | **\$ 884** | **\$ 4,131** | **\$ 203** | **\$ 5,253** |

The carrying amount of indefinite-lived intangible assets is provided in the following table:

| $ millions, as at or for the year ended October 31 | Contract based (1) | Brand name (2) | Total |
|---|---|---|---|
| **2021** | | | |
| Balance at beginning of year | \$ 116 | \$ 26 | \$ 142 |
| Foreign currency translation adjustments | (2) | (2) |
| Balance at end of year | **\$ 116** | **\$ 24** | **\$ 140** |
| **2020** | | | |
| Balance at beginning of year | \$ 116 | \$ 26 | \$ 142 |
| Foreign currency translation adjustments | (2) | (2) |
| Balance at end of year | **\$ 116** | **\$ 24** | **\$ 140** |

(1) Represents management contracts purchased as part of past acquisitions.
(2) Acquired as part of the CIBC FirstCaribbean acquisition.

The components of finite-lived software and other intangible assets are as follows:

| $ millions, as at or for the year ended October 31 | Software (1) | Core deposit intangibles (2) | Contract based (3) | Customer relationships (4) | Total |
|---|---|---|---|---|---|
| **Gross carrying amount** | | | | | |
| Balance at beginning of year | \$ 3,508 | \$ 619 | \$ 22 | \$ 257 | \$ 4,406 |
| Additions | 592 | - | - | - | 592 |
| Disposals (5) | (19) | - | (44) | (2) | (18) | (84) |
| Adjustments (6) | (20) | - | - | - | (20) |
| Balance at end of year | **\$ 4,061** | **\$ 575** | **\$ 20** | **\$ 239** | **\$ 4,895** |
| **2020** | | | | | |
| Balance at end of year | \$ 3,508 | \$ 619 | \$ 22 | \$ 257 | \$ 4,406 |
| **2021** | | | | | |
| Accumulated amortization | | | | | |
| Balance at beginning of year | \$ 1,983 | \$ 457 | \$ 12 | \$ 135 | \$ 2,587 |
| Amortization and impairment (5) | 408 | 51 | 3 | 25 | 487 |
| Disposals (5) | (8) | - | - | - | (8) |
| Adjustments (6) | (16) | (33) | (2) | (9) | (60) |
| Balance at end of year | **\$ 2,367** | **\$ 475** | **\$ 13** | **\$ 151** | **\$ 3,006** |
| **2020** | | | | | |
| Balance at end of year | \$ 1,983 | \$ 457 | \$ 12 | \$ 135 | \$ 2,587 |
| **Net book value** | | | | | |
| As at October 31, 2021 | \$ 1,694 | \$ 100 | \$ 7 | \$ 88 | \$ 1,889 |
| As at October 31, 2020 | \$ 1,525 | \$ 162 | \$ 10 | \$ 122 | \$ 1,819 |

(1) Includes $659 million (2020: $620 million) of work-in-progress not subject to amortization.
(2) Acquired as part of the acquisitions of CIBC FirstCaribbean and The PrivateBank.
(3) Represents a combination of management contracts purchased as part of past acquisitions including The PrivateBank and Geneva Advisors in 2017, as well as Lowenhaupt Global Advisors, LLC (LGA) and Cleary Gull in 2019.
(4) Represents customer relationships associated with past acquisitions including The PrivateBank and Geneva Advisors in 2017, and LGA in 2019.
(5) Includes write-offs of fully amortized assets.
(6) Includes foreign currency translation adjustments.

Net additions and disposals of gross carrying amount during the year were: Canadian Personal and Business Banking net disposals of $2 million (2020: net additions of $1 million); Canadian Commercial Banking and Wealth Management net disposals of nil (2020: net disposals of nil); U.S. Commercial Banking and Wealth Management net additions of $5 million (2020: net disposals of $8 million); Capital Markets net disposals of nil (2020: net disposals of nil); and Corporate and Other net additions of $570 million (2020: net additions of $459 million).

### Note 10 Other assets

| $ millions, as at October 31 | 2021 | 2020 |
|---|---|---|
| Accrued interest receivable | \$ 1,271 | \$ 1,317 |
| Defined benefit asset (Note 19) | 1,372 | 247 |
| Precious metals (1) | 3,005 | 2,731 |
| Brokers' client accounts | 12,273 | 9,153 |
| Current tax receivable | 1,676 | 2,201 |
| Other prepayments | 582 | 557 |
| Derivative collateral receivable | 6,599 | 4,950 |
| Accounts receivable | 859 | 519 |
| Other (2) | 1,588 | 1,533 |
| **Total** | **\$ 29,225** | **\$ 23,208** |

(1) Includes gold and silver bullion that are measured at fair value using unadjusted market prices quoted in active markets.
(2) Includes investments in subleases of $664 million as at October 31, 2021 (2020: $749 million), related to certain subleases we have re-assessed as finance subleases as part of the adoption of IFRS 16. For the year ended October 31, 2021, finance income related to our investment in sublease was $47 million (2020: $53 million). Future lease payments receivable are $472 million over the next five years, and $683 million thereafter until expiry of the subleases.

### Note 11 Deposits

| $ millions, as at October 31 | Payable on demand (3) | Payable after notice (4) | Payable on a fixed date (5)(6) | Total | 2021 | 2020 |
|---|---|---|---|---|---|---|
| Personal | \$ 16,339 | \$ 146,017 | \$ 51,576 | \$ 213,932 | \$ 202,152 |
| Business and government (7)(8) | 100,719 | 86,394 | 157,275 | 344,388 | 311,426 |
| Bank | 10,334 | 161 | 9,751 | 20,246 | 17,011 |
| Secured borrowings (9) | | | 42,592 | 42,592 | 40,151 |
| **Total deposits** | **\$ 127,392** | **\$ 232,572** | **\$ 261,194** | **\$ 621,158** | **\$ 570,740** |
| **Comprises:** | | | | | | |
| Held at amortized cost | | | | 602,628 | 557,321 |
| Designated at fair value | | | | 18,530 | 13,419 |
| **Total deposits include (10):** | | | | **\$ 621,158** | **\$ 570,740** |
| Non-interest-bearing deposits | | | | | | |
| Canada | 93,850 | | | | 71,122 |
| U.S. | 16,522 | | | | 13,833 |
| Other international | 5,601 | | | | 5,798 |
| Interest-bearing deposits | | | | 406,642 | 389,439 |
| Canada | 70,312 | | | | 66,399 |
| U.S. | 28,231 | | | | 24,149 |
| Other international | | | | | |

(1) Includes deposits of $215.4 billion (2020: $185.2 billion) denominated in U.S. dollars and deposits of $37.1 billion (2020: $30.2 billion) denominated in other foreign currencies.
(2) Net of purchased notes of $2.2 million (2020: $3.1 billion).
(3) Includes all deposits for which we do not have the right to require notice of withdrawal. These deposits are generally chequing accounts.
(4) Includes all deposits for which we can legally require notice of withdrawal. These deposits are generally savings accounts.
(5) Includes all deposits that mature on a specified date. These deposits are generally term deposits, guaranteed investment certificates, and similar instruments.
(6) Includes $32.6 billion (2020: $19.9 billion) of deposits which are subject to the bank recapitalization (bail-in) conversion regulations issued by the Department of Finance Canada. These regulations provide certain statutory powers to the Canada Deposit Insurance Corporation (CDIC), including the ability to convert specified eligible shares and liabilities of CIBC into common shares in the event that CIBC is determined to be non-viable.
(7) Includes $300 million (2020: $303 million) of Notes issued to CIBC Capital Trust. These Notes were redeemed on November 1, 2021. For additional information, see Note 17.
(8) Includes $8.8 billion (2020: $9.1 billion) of structured note liabilities that were sold upon issuance to third-party financial intermediaries, who may resell the notes to retail investors in foreign jurisdictions.
(9) Comprises liabilities issued by or as a result of activities associated with the securitization of residential mortgages, Covered Bond Programme, and consolidated securitization vehicles.
(10) Classification is based on geographical location of the CIBC office.

### Note 12 Other liabilities

| $ millions, as at October 31 | 2021 | 2020 |
|---|---|---|
| Accrued interest payable | \$ 781 | \$ 1,200 |
| Defined benefit liability (Note 19) | 602 | 676 |
| Gold and silver certificates | 113 | 133 |
| Brokers' client accounts | 5,809 | 5,303 |
| Derivative collateral payable | 6,662 | 4,772 |
| Negotiable instruments | 1,149 | 1,110 |
| Accrued employee compensation and benefits | 2,961 | 2,174 |
| Accounts payable and accrued expenses | 2,259 | 2,153 |
| Other (1) | 4,587 | 4,613 |
| **Total** | **\$ 24,923** | **\$ 22,134** |

(1) Includes the carrying value of our lease liabilities, which was $2,134 million as at October 31, 2021 (2020: $1,866 million). The undiscounted cash flows related to the contractual maturity of our lease liabilities is $363 million for the period less than 1 year, $1,074 million between years 1-5, and $1,107 million thereafter until expiry of the leases. During the year ended October 31, 2021, interest expense on lease liabilities was $51 million (2020: $60 million).

### Note 13 Derivative instruments

As described in Note 1, in the normal course of business, we use various derivative instruments for both trading and ALM purposes. These derivatives limit, modify or give rise to varying degrees and types of risk.

| $ millions, as at October 31 | Trading (Note 3) | ALM (Note 3) (1) |
|---|---|---|
| | Assets | Liabilities | Assets | Liabilities |
| 2021 | \$ 34,647 | \$ 30,040 | \$ 1,265 | \$ 2,061 |
| | **\$ 35,912** | **\$ 32,101** | | |
| **2020** | | | | |
| Assets | Liabilities | Assets | Liabilities |
| \$ 31,356 | \$ 29,392 | \$ 1,374 | \$ 1,116 |
| | **\$ 32,730** | **\$ 30,508** | | |

(1) Comprised of derivatives that qualify for hedge accounting under IAS 39 and derivatives used for economic hedges.

#### Derivatives used by CIBC

The majority of our derivative contracts are OTC transactions, which consist of: (i) contracts that are bilaterally negotiated and settled between CIBC and the counterparty to the contract; and (ii) contracts that are bilaterally negotiated and then cleared through a central counterparty (CCP).

Bilaterally negotiated and settled contracts are usually traded under a standardized International Swaps and Derivatives Association (ISDA) agreement with collateral posting arrangements between CIBC and its counterparties. Terms are negotiated directly with counterparties and the contracts have industry-standard settlement mechanisms prescribed by ISDA. Centrally cleared contracts are generally bilaterally negotiated and then novated to, and cleared through, a CCP. The industry promotes the use of CCPs to clear OTC trades. The central clearing of derivative contracts generally facilitates the reduction of credit exposures due to the ability to net settle offsetting positions. Consequently, derivative contracts cleared through CCPs generally attract less capital relative to those settled with non-CCPs.

The remainder of our derivative contracts are exchange-traded derivatives, which are standardized in terms of their amounts and settlement dates, and are bought and sold on organized and regulated exchanges. These exchange-traded derivative contracts consist primarily of options and futures.

#### Interest rate derivatives

Forward rate agreements are OTC contracts that effectively fix a future interest rate for a period of time. A typical forward rate agreement provides that at a pre-determined future date, a cash settlement will be made between the counterparties based upon the difference between a contracted rate and a market rate to be determined in the future, calculated on a specified notional principal amount. No exchange of principal amount takes place. Certain forward rate agreements are bilaterally transacted and then novated and settled through a clearing house which acts as a CCP.

Interest rate swaps are OTC contracts in which two counterparties agree to exchange cash flows over a period of time based on rates applied to a specified notional principal amount. A typical interest rate swap would require one counterparty to pay a fixed market interest rate in exchange for a variable market interest rate determined from time to time, with both calculated on a specified notional principal amount. No exchange of principal amount takes place. Certain interest rate swaps are bilaterally transacted and then novated and settled through a clearing house which acts as a CCP.

Interest rate options are contracts in which one party (the purchaser of an option) acquires from another party (the writer of an option), in exchange for a premium, the right, but not the obligation, to either buy or sell, on a specified future date or within a specified time, a specified financial instrument at a contracted price. The underlying financial instrument has a market price which varies in response to changes in interest rates. Options are transacted in both OTC and exchange-traded markets.

Interest rate futures are standardized contracts transacted on an exchange. They are based upon an agreement to buy or sell a specified quantity of a financial instrument on a specified future date, at a contracted price. These contracts differ from forward rate agreements in that they are in standard amounts with standard settlement dates and are transacted through an exchange.

#### Foreign exchange derivatives

Foreign exchange forwards are OTC contracts in which one counterparty contracts with another to exchange a specified amount of one currency for a specified amount of a second currency, at a future date or range of dates.

Foreign exchange futures contracts are similar in mechanics to foreign exchange forward contracts except that they are in standard currency amounts with standard settlement dates and are transacted through an exchange.

Foreign exchange swap contracts comprise foreign exchange swaps and cross-currency interest rate swaps. Foreign exchange swaps are transactions in which a currency is simultaneously purchased in the spot market and sold for a different currency in the forward market, or vice versa. Cross-currency interest rate swaps are transactions in which counterparties exchange principal and interest flows in different currencies over a period of time. These contracts are used to manage both currency and interest rate exposures.

#### Credit derivatives

Credit derivatives are OTC contracts designed to transfer the credit risk in an underlying financial instrument (usually termed as a reference asset) from one counterparty to another. The most common credit derivatives are CDS and certain TRS.

CDS contracts provide protection against the decline in value of a reference asset as a result of specified credit events such as default or bankruptcy. These derivatives are similar in structure to an option whereby the purchaser pays a premium to the seller of the CDS contract in return for payment contingent on the occurrence of a credit event. The protection purchaser has recourse to the protection seller for the difference between the face value of the CDS contract and the fair value of the reference asset at the time of settlement. Neither the purchaser nor the seller under the CDS contract has recourse to the entity that issued the reference asset. Certain CDS contracts are cleared through a CCP.

In credit derivative TRS contracts, one counterparty agrees to pay or receive cash amounts based on the returns of a reference asset, including interest earned on these assets in exchange for amounts that are based on prevailing market funding rates. These cash settlements are made regardless of whether there is a credit event. Upon the occurrence of a credit event, the parties may either exchange cash payments according to the value of the defaulted assets or exchange cash based on the notional amount for physical delivery of the defaulted assets.

#### Equity derivatives

Equity swaps are OTC contracts in which one counterparty agrees to pay, or receive from the other, cash amounts based on changes in the value of a stock index, a basket of stocks or a single stock in exchange for amounts that are based either on prevailing market funding rates or changes in the value of a different stock index, basket of stocks or a single stock. These contracts generally include payments in respect of dividends.

Equity options give the purchaser of the option, for a premium, the right, but not the obligation, to buy from or sell to the writer of an option, an underlying stock index, basket of stocks, or a single stock at a contracted price. Options are transacted in both OTC and exchange markets.

Equity index futures are standardized contracts transacted on an exchange. They are based on an agreement to pay or receive a cash amount based on the difference between the contracted price level of an underlying stock index and its corresponding market price level at a specified future date. There is generally no actual delivery of stocks that comprise the underlying index. These contracts are in standard amounts with standard settlement dates.

#### Precious metal and other commodity derivatives

We also transact in other derivative products, including commodity forwards, futures, swaps and options, such as precious metal and energy-related products in both OTC and exchange markets.

## Notional amounts

The notional amounts are not recorded as assets or liabilities, as they represent the face amount of the contract to which a rate or price is applied to determine the amount of cash flows to be exchanged. In most cases, notional amounts do not represent the potential gain or loss associated with market or credit risk of such instruments.

The following table presents the notional amounts of derivative instruments:

| $ millions, as at October 31 | Residual term to contractual maturity | | | | Total notional amounts | 2021 | | | 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|
| | Less than 1 year | 1 to 5 years | Over 5 years | | Trading | ALM | Trading | ALM |
| **Interest rate derivatives** | | | | | | | | | |
| Over-the-counter | | | | | | | | | |
| Forward rate agreements | \$ 9,679 | \$ 3,081 | \$ - | \$ 12,760 | \$ 7,149 | \$ 5,611 | \$ 10,593 | \$ 3,026 |
| Centrally cleared forward rate agreements | 87,710 | 12,488 | - | 100,198 | 100,198 | - | 149,428 |
| Swap contracts | 46,976 | 132,683 | 87,201 | 266,860 | 243,655 | 23,205 | 264,184 | 29,852 |
| Centrally cleared swap contracts | 1,064,805 | 1,752,039 | 642,217 | 3,459,061 | 2,998,139 | 460,922 | 2,840,793 | 445,189 |
| Purchased options | 5,794 | 6,429 | 1,440 | 13,663 | 13,319 | 344 | 9,188 | 1,754 |
| Written options | 7,384 | 5,573 | 1,216 | 14,173 | 13,912 | 261 | 9,370 | 766 |
| | 1,222,348 | 1,912,293 | 732,074 | 3,866,715 | 3,376,372 | 490,343 | 3,283,556 | 480,587 |
| Exchange-traded | | | | | | | | | |
| Futures contracts | 134,137 | 30,507 | - | 164,644 | 164,644 | - | 269,670 | - |
| Purchased options | 5,251 | - | - | 5,251 | 5,251 | - | 5,251 | 3,060 |
| Written options | 10,251 | - | - | 10,251 | 10,251 | - | 10,251 | 5,060 |
| | 149,639 | 30,507 | - | 180,146 | 180,146 | - | 277,790 | - |
| **Total interest rate derivatives** | **1,371,987** | **1,942,800** | **732,074** | **4,046,861** | **3,556,518** | **490,343** | **3,561,346** | **480,587** |
| **Foreign exchange derivatives** | | | | | | | | | |
| Over-the-counter | | | | | | | | | |
| Forward contracts | 695,383 | 19,864 | 1,318 | 716,565 | 709,628 | 6,937 | 1,071,423 | 8,751 |
| Swap contracts | 128,433 | 260,439 | 155,259 | 544,131 | 491,884 | 52,247 | 486,689 | 42,326 |
| Purchased options | 18,224 | 1,685 | 22 | 19,931 | 19,843 | 88 | 19,008 | 20,529 |
| Written options | 20,529 | 2,090 | 7 | 22,626 | 21,887 | 739 | 22,229 | 454 |
| | 862,569 | 284,078 | 156,606 | 1,303,253 | 1,243,242 | 60,011 | 1,599,349 | 51,531 |
| Exchange-traded | | | | | | | | | |
| Futures contracts | 6 | - | - | 6 | 6 | - | - | 3 |
| **Total foreign exchange derivatives** | **862,575** | **284,078** | **156,606** | **1,303,259** | **1,243,248** | **60,011** | **1,599,352** | **51,531** |
| **Credit derivatives** | | | | | | | | | |
| Over-the-counter | | | | | | | | | |
| Credit default swap contracts - protection purchased | 1,102 | 574 | 561 | 2,237 | 2,210 | 27 | 1,907 | 29 |
| Centrally cleared credit default swap contracts - protection purchased | 97 | 561 | 989 | 1,647 | 1,524 | 123 | 2,424 | 160 |
| Credit default swap contracts - protection sold | 874 | 334 | 96 | 1,304 | 1,304 | - | 614 | 9 |
| Centrally cleared credit default swap contracts - protection sold | 68 | 309 | 377 | 377 | - | 1,309 | - |
| **Total credit derivatives** | **2,073** | **1,537** | **1,955** | **5,565** | **5,415** | **150** | **6,254** | **198** |
| **Equity derivatives** | | | | | | | | | |
| Over-the-counter | 59,281 | 25,562 | 600 | 85,443 | 83,612 | 1,831 | 86,865 | 4,914 |
| Exchange-traded | 75,276 | 18,097 | 191 | 93,564 | 93,564 | - | 89,824 | - |
| | 134,557 | 43,659 | 791 | 179,007 | 177,176 | 1,831 | 176,689 | 4,914 |
| **Precious metal derivatives** | | | | | | | | | |
| Over-the-counter | 6,678 | 140 | - | 6,818 | 6,818 | - | 9,681 | - |
| Exchange-traded | 406 | 4 | - | 410 | 410 | - | 524 | - |
| **Total precious metal derivatives** | **7,084** | **144** | **-** | **7,228** | **7,228** | **-** | **10,205** | **-** |
| **Other commodity derivatives** | | | | | | | | | |
| Over-the-counter | 17,510 | 23,142 | 558 | 41,210 | 41,210 | - | 34,142 | - |
| Centrally cleared commodity derivatives | 119 | - | - | 119 | 119 | - | 8 | 8 |
| Exchange-traded | 21,810 | 12,151 | 412 | 34,373 | 34,373 | - | 18,700 | - |
| **Total other commodity derivatives** | **39,439** | **35,293** | **970** | **75,702** | **75,702** | **-** | **52,897** | **52,897** |
| **Total notional amount of which:** | | | | | | | | | |
| Over-the-counter (1) | \$ 2,417,715 | \$ 2,246,752 | \$ 891,793 | \$ 5,617,622 | \$ 5,065,287 | \$ 552,335 | \$ 5,406,743 | \$ 537,238 |
| Exchange-traded | 2,170,578 | 60,759 | 603 | 308,499 | 308,499 | | | |

(1) For OTC derivatives that are not centrally cleared, $1,622.2 billion (2020: $1,984.6 billion) are with counterparties that have two-way collateral posting arrangements, $37.1 billion (2020: $44.9 billion) are with counterparties that have one-way collateral posting arrangements, and $88.4 billion (2020: $88.3 billion) are with counterparties that have no collateral posting arrangements. Counterparties with whom we have more than insignificant OTC derivative portfolios and one-way collateral posting arrangements are either sovereign entities or supra national financial institutions.

### Risk

In the following sections, we discuss the risks related to the use of derivatives and how we manage these risks.

#### Market risk

Derivatives are financial instruments where valuation is linked to changes in interest rates, foreign exchange rates, equity, commodity, credit prices or indices. Changes in value as a result of the aforementioned risk factors are referred to as market risk.

Market risk arising from derivative trading activities is managed in order to mitigate risk in line with CIBC's risk appetite. To manage market risk, we set market risk limits and may enter into hedging transactions.

#### Credit risk

Credit risk arises from the potential for a counterparty to default on its contractual obligations and the possibility that prevailing market conditions are such that a loss would occur in replacing the defaulted transaction.

We limit the credit risk of OTC derivatives through the use of ISDA master netting agreements, collateral, CCPs and other credit mitigation techniques. We clear eligible derivatives through CCPs in accordance with various global initiatives. Where feasible, we novate existing bilaterally negotiated and settled derivatives to a CCP in an effort to reduce CIBC's credit risk exposure. We establish counterparty credit limits and limits for CCP exposures based on a counterparty's creditworthiness and the type of trading relationship with each counterparty (underlying agreements, business volumes, product types, tenors, etc.).

We negotiate netting agreements to contain the build-up of credit exposure resulting from multiple transactions with more active counterparties. Such agreements provide for the simultaneous close-out and netting of all transactions with a counterparty, in the case of a counterparty default. A number of these agreements incorporate a Credit Support Annex, which is a bilateral security agreement that, among other things, provides for the exchange of collateral between parties in the event that one party's exposure to the other exceeds agreed upon thresholds.

Credit risk on exchange-traded futures and options is limited, as these transactions are standardized contracts executed on established exchanges, whose CCPs assume the obligations of both counterparties. Similarly, swaps that are centrally cleared represent limited credit risk because these transactions are novated to the CCP, which assumes the obligations of the original bilateral counterparty. All exchange-traded and centrally cleared contracts are subject to initial margin and daily settlement of variation margins, designed to protect participants from losses incurred from a counterparty default.

A CVA is determined using the fair value based exposure we have on derivative contracts. 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 derivative counterparties may change in the future, which could result in significant future losses.

The following table summarizes our credit exposure arising from derivatives, which includes the current replacement cost, credit equivalent amount and risk-weighted amount.

In the second quarter of 2020, we adopted the Internal Model Method (IMM) for the determination of the EAD amount for most of our derivatives portfolios. The EAD amount is based on effective expected positive exposure (EEPE) which computes, through simulation, the expected exposures with consideration to the expected movements in underlying risk factor and netting/collateral agreements. It is calculated as EEPE multiplied by the prescribed alpha factor of 1.4 and is reduced by CVA losses. The EAD amount is then multiplied by counterparty risk variables to arrive at the risk-weighted amount. The risk-weighted amount is used in determining the regulatory capital requirements for derivatives.

From the first quarter of 2019 to the second quarter of 2020, the Standardized Approach for Counterparty Credit Risk (SA-CCR) was used in calculating the replacement cost, EAD amount and risk-weighted assets. The current replacement cost was the estimated cost to replace all contracts that have a positive market value, representing an unrealized gain to us. The replacement cost of an instrument was dependent upon its terms relative to prevailing market prices. Replacement cost included the impact of certain collateral amounts and the impact of master netting agreements. The EAD amount was calculated as the sum of replacement cost and the potential future exposure, multiplied by an alpha of 1.4, and was reduced by CVA losses. The potential future exposure was an estimate of the amount by which the current replacement cost could increase over the remaining term of each transaction, based on a formula prescribed by OSFI. Similar to IMM, the EAD amount was then multiplied by counterparty risk variables to arrive at the risk-weighted amount.

| | Current replacement cost (2) | | | Risk-equivalent amount (3) | Credit-weighted amount | 2020 (1) | | | Risk-equivalent amount (3) | Credit-weighted amount |
|---|---|---|---|---|---|---|---|---|---|---|
| **$ millions, as at October 31** | **Trading** | **ALM** | **Total** | | **Trading** | **ALM** | **Total** | | | |
| **Interest rate derivatives** | | | | | | | | | | |
| Over-the-counter | \$ 2,116 | \$ 141 | \$ 2,257 | \$ 35 | \$ 3,974 | \$ 237 | \$ 4,211 | \$ 135 | \$ 6,744 | \$ 2,705 |
| Forward rate agreements | | | | | | | | | | |
| Swap contracts | 14 | 2 | 16 | 4 | 17 | 6 | 23 | 5 | 26 | 12 |
| Purchased options | | | | | | | | | | |
| Written options | | | | | | | | | | |
| Exchange-traded | 2,134 | 147 | 2,281 | 4,251 | 1,409 | 4,000 | 259 | 4,259 | 6,919 | 2,745 |
| Purchased options | 3 | - | 3 | 332 | 10 | 309 | 9 |
| | 2,137 | 147 | 2,284 | 4,583 | 1,419 | 4,000 | 259 | 4,259 | 7,228 | 2,754 |
| **Foreign exchange derivatives** | | | | | | | | | | |
| Over-the-counter | | | | | | | | | | |
| Forward contracts | 943 | 196 | 1,139 | 4,027 | 1,335 | 851 | 364 | 1,215 | 4,974 | 1,423 |
| Swap contracts | 452 | 389 | 841 | 2,684 | 751 | 358 | 481 | 839 | 2,324 | 700 |
| Purchased options | 144 | 14 | 158 | 156 | 54 | 116 | 1 | 117 | 182 | 65 |
| Written options | 40 | 40 | 50 | 19 | 47 | 47 | 44 | 20 |
| | 1,579 | 599 | 2,178 | 6,917 | 2,159 | 1,372 | 846 | 2,218 | 7,524 | 2,208 |
| **Credit derivatives** | | | | | | | | | | |
| Over-the-counter | | | | | | | | | | |
| Credit default swap contracts - protection purchased | 3 | 1 | 4 | 105 | 16 | 7 | 9 | 16 | 144 | 21 |
| Credit default swap contracts - protection sold | 1 | 1 | 18 | 7 | 10 | 10 | 13 | 6 |
| | 4 | 1 | 5 | 123 | 23 | 17 | 9 | 26 | 157 | 27 |
| **Equity derivatives** | | | | | | | | | | |
| Over-the-counter | 254 | 79 | 333 | 3,910 | 935 | 275 | 55 | 330 | 3,100 | 658 |
| Exchange-traded | 1,310 | 1,310 | 6,298 | 195 | 579 | 579 | 3,929 | 120 |
| | 1,564 | 79 | 1,643 | 10,208 | 1,130 | 854 | 55 | 909 | 7,029 | 778 |
| **Precious metal derivatives** | | | | | | | | | | |
| Over-the-counter | 132 | 147 | (15) | 283 | 366 | (83) |
| Exchange-traded | 41 | 2 | 43 | 128 | 88 | 58 | 58 | 136 | 55 |
| **Total precious metal derivatives** | 132 | 147 | (15) | 283 | 90 | 58 | 58 | 156 | 56 |
| **Other commodity derivatives** | | | | | | | | | | |
| Over-the-counter | 8,151 | 2,348 | 5,803 | 2,604 | 1,806 | 798 |
| Exchange-traded | 343 | 1,122 | (779) | 271 | 325 | (54) |
| | 8,494 | 3,470 | 5,024 | 2,875 | 2,131 | 744 |
| **Total held for trading** | **34,647** | **30,040** | **4,607** | **31,356** | **29,392** | **1,964** |
| **Held for ALM** | | | | | | | | | |
| **Interest rate derivatives** | | | | | | | | | | |
| Over-the-counter | | | | | | | | | | |
| Forward rate agreements | 390 | 378 | 12 | 328 | 393 | (65) |
| Swap contracts | 22 | 40 | (18) | 14 | 14 | - |
| Purchased options | 805 | 1,641 | (836) | 1,021 | 684 | 337 |
| Written options | 827 | 1,681 | (854) | 1,035 | 698 | 337 |
| **Total foreign exchange derivatives** | 1,265 | 2,061 | (796) | 1,374 | 1,116 | 258 |
| **Credit derivatives** | | | | | | | | | | |
| Over-the-counter | 1 | - | 1 | (1) | (1) | - |
| **Total credit derivatives** | 1 | - | 1 | (1) | (1) | - |
| **Equity derivatives** | | | | | | | | | | |
| Over-the-counter | 48 | 1 | 47 | 8 | 24 | (16) |
| **Total equity derivatives** | 48 | 1 | 47 | 8 | 24 | (16) |
| **Other commodity derivatives** | | | | | | | | | | |
| Over-the-counter | 3 | - | 3 | 3 | 3 | - |
| **Total other commodity derivatives** | 3 | - | 3 | 3 | 3 | - |
| **Total held for ALM** | **1,265** | **2,061** | **(796)** | **1,374** | **1,116** | **258** |
| **Total fair value** | **35,912** | **32,101** | **3,811** | **32,730** | **30,508** | **2,222** |
| **Less: effect of netting** | **(16,585)** | **(16,585)** | | **(19,347)** | **(19,347)** | |
| | **\$ 19,327** | **\$ 15,516** | **\$ 3,811** | **\$ 13,383** | **\$ 11,161** | **\$ 2,222** |

#### Financial instruments carried on the consolidated balance sheet at fair value

The table below presents the fair values of financial instruments by level within the fair value hierarchy:

| $ millions, as at October 31 | Level 1 | Level 2 | Level 3 | Total | Total | Fair value over (under) carrying value |
|---|---|---|---|---|---|---|
| | Quoted market price | Valuation technique - observable market inputs | Valuation technique - non-observable market inputs | 2021 | 2020 | 2021 | 2020 |
| **2021** | | | | | | | |
| **Financial assets** | | | | | | | |
| Deposits with banks | \$ - | \$ 296 | \$ - | \$ 296 | \$ 948 | \$ - | \$ - |
| Securities mandatorily measured and designated at FVTPL | | | | | | | |
| Government issued or guaranteed | 3,015 | 3,917 | 24,737 (1) | 27,752 | 29,008 | - | - |
| Corporate equity | 37,981 | 27,919 | 219 | 66,119 | 28,144 | 28,144 |
| Corporate debt | - | - | 3,997 | 3,997 | 3,550 | 3,550 |
| Mortgage- and asset-backed | - | - | 2,235 (2) | 2,235 | 2,153 | 2,153 |
| Loans mandatorily measured at FVTPL | 40,996 | 31,836 | 30,681 | 61 | 176 | 72,245 | 62,693 |
| Business and government | - | - | 24,945 | 23,022 | 1,038 (3) | 626 (3) | 25,983 | 23,648 |
| Residential mortgages | - | - | 16 | 63 | 16 | 63 |
| | - | - | 24,961 | 23,085 | 1,038 | 626 | 25,999 | 23,711 |
| Debt securities measured at FVOCI | | | | | | | | |
| Government issued or guaranteed | 5,309 | 3,912 | 38,122 | 41,269 | 43,431 | 45,181 |
| Corporate debt | - | - | 7,833 | 6,224 | 7,833 | 6,224 |
| Mortgage- and asset-backed | - | - | 1,897 | 2,563 | 1,897 | 2,563 |
| | 5,309 | 3,912 | 47,852 | 50,056 | 53,161 | 53,968 |
| Equity securities designated at FVOCI | | | | | | | | |
| Corporate equity | 125 | 41 | 319 | 304 | 392 | 240 | 836 | 585 |
| | 125 | 41 | 319 | 304 | 392 | 240 | 836 | 585 |
| Securities purchased under resale agreements measured at FVTPL | 7,090 | 7,505 | 7,090 | 7,505 |
| Derivative instruments | | | | | | | | | |
| Interest rate | 3 | 4 | 8,948 | 12,793 | 35 | 48 | 8,986 | 12,845 |
| Foreign exchange | 4,650 | 3,153 | 11,707 | 11,462 | 11,707 | 11,462 |
| Credit | 4 | 8 | 49 | 98 | 53 | 106 |
| Equity | 4,650 | 3,153 | 1,877 | 1,791 | 13 | 212 | 6,540 | 5,156 |
| Precious metal | 132 | 283 | 132 | 283 |
| Other commodity | 343 | 271 | 4,996 | 3,428 | 30,819 | 28,944 | 97 | 358 | 35,912 | 32,730 |
| **Total financial assets** | **\$ 51,426** | **\$ 39,217** | **\$ 142,525** | **\$ 141,523** | **\$ 1,588** | **\$ 1,400** | **\$ 195,539** | **\$ 182,140** |
| **Financial liabilities** | | | | | | | | | |
| Deposits and other liabilities (4) | \$ (691) | \$ (541) | \$ (15) | \$ (14) | \$ (93) | \$ 257 | \$ (742) |
| Obligations related to securities sold short | (11,226) | (5,363) | (3,975) | (17,036) | (11,564) | (10,600) | (22,790) | (15,963) |
| Obligations related to securities sold under repurchase agreements | (3,422) | (3,537) | (1,122) | (3,288) | (3,975) | (17,036) |
| Derivative instruments | | | | | | | | | |
| Interest rate | (15,770) | (9,225) | (27,290) | (26,348) | (267) | (298) | (32,101) | (30,508) |
| Foreign exchange | (4,544) | (3,862) | (50) | (41) | (54) | (107) | (8,779) | (6,988) |
| Credit | | | (147) | (366) | - | (147) | (366) |
| Equity | | | (2,348) | (1,806) | (2,348) | (2,131) |
| Precious metal | | | (147) | (366) | (147) | (366) |
| Other commodity | | | | | | | | | |
| **Total financial liabilities** | **\$ (15,770)** | **\$ (9,225)** | **\$ (61,531)** | **\$ (67,160)** | **\$ (1,009)** | **\$ (294)** | **\$ (78,310)** | **\$ (76,679)** |

(1) Includes $49 million related to securities designated at FVTPL (2020: $57 million).
(2) Includes $4 million related to ABS designated at FVTPL (2020: $60 million).
(3) Includes $332 million related to loans designated at FVTPL (2020: $357 million).
(4) Comprises deposits designated at FVTPL of $18,530 million (2020: $13,419 million), net bifurcated embedded derivative liabilities of $750 million (2020: net bifurcated embedded derivative assets of $389 million), other liabilities designated at FVTPL of $51 million (2020: $9 million), and other financial liabilities measured at fair value of $113 million (2020: $133 million).

#### Sensitivity of Level 3 financial assets and liabilities

The following section describes the significant non-observable inputs identified in the table above, the interrelationships between those inputs, where applicable, and the change in fair value if changing one or more of the non-observable inputs within a reasonably possible range would impact the fair value significantly.

The fair value of our limited partnerships is determined based on the net asset value provided by the fund managers, adjusted as appropriate. The fair value of limited partnerships is sensitive to changes in the net asset value, and by adjusting the net asset value within a reasonably possible range, the aggregate fair value of our limited partnerships would increase or decrease by $90 million (2020: $63 million).

While our standalone derivatives are recorded as derivative assets or derivative liabilities, our derivatives embedded in our structured note deposit liabilities or deposit liabilities designated at FVTPL are recorded within deposits and other liabilities. The determination of the fair value of certain Level 3 embedded derivatives and certain standalone derivatives requires significant assumptions and judgment to be applied to both the inputs and the valuation techniques employed. These derivatives are sensitive to long-dated market volatility and correlation inputs, which we consider to be non-observable. Market volatility is a measure of the anticipated future variability of a market price and is an important input for pricing options, which are inherent in many of our Level 3 derivatives. A higher market volatility generally results in a higher option price, with all else held constant, due to the higher probability of obtaining a greater return from the option, and results in an increase in the fair value of our Level 3 derivatives. Correlation inputs are used to value those derivatives where the payout is dependent upon more than one market price. For example, the payout of an equity basket option is based upon the performance of a basket of stocks, and the interrelationships between the price movements of those stocks. A positive correlation implies that two inputs tend to change the fair value in the same direction, while a negative correlation implies that two inputs tend to change the fair value in the opposite direction. Changes in market correlation could result in an increase or a decrease in the fair value of our Level 3 derivatives and embedded derivatives. By adjusting the non-observable inputs by reasonably alternative amounts, the fair value of our net Level 3 standalone derivatives and embedded derivatives would increase by $95 million or decrease by $86 million (2020: increase by $84 million or decrease by $74 million).

#### Financial instruments designated at FVTPL

Financial assets designated at FVTPL include certain debt securities and loans that were designated at FVTPL on the basis of being managed together with derivatives to eliminate or significantly reduce financial risks.

Deposits and other liabilities designated at FVTPL include:
* Certain business and government deposit liabilities, certain secured borrowings and certain obligations related to securities sold under repurchase agreements that are economically hedged with derivatives and other financial instruments, and certain financial liabilities that have one or more embedded derivatives that significantly modify the cash flows of the host liability but are not bifurcated from the host instrument; and
* Our mortgage commitments to retail clients to provide mortgages at fixed rates that are economically hedged with derivatives and other financial instruments.

The carrying value of our securities designated at FVTPL represents our maximum exposure to credit risk related to these assets designated at FVTPL. The change in fair value attributable to change in credit risk of these assets designated at FVTPL during the year is insignificant (2020: insignificant). The fair value of a liability designated at FVTPL reflects the credit risk relating to that liability. For those liabilities designated at FVTPL for which we believe changes in our credit risk would impact the fair value from the note holders' perspective, the related fair value changes were recognized in OCI. Changes in fair value attributable to changes in our own credit are measured as the difference between: (i) the period-over-period change in the present value of the expected cash flows using a discount curve adjusted for our own credit; and (ii) the period-over-period change in the present value of the same expected cash flows using a discount curve based on the benchmark curve adjusted for our own credit as implied at inception of the liability designated at FVTPL. The pre-tax impact of changes in CIBC's own credit risk on our liabilities designated at FVTPL was gains of $16 million for the year and losses of $39 million cumulatively (2020: losses of $76 million for the year and losses of $55 million cumulatively). A net gain of $50 million, net of hedges (2020: a net gain of $60 million), was realized for assets designated at FVTPL and liabilities designated at FVTPL, which is included in the consolidated statement of income under Gains (losses) from financial instruments measured/designated at FVTPL, net.

The estimated contractual amount payable at maturity of deposits designated at FVTPL, which is based on the par value and the intrinsic value of the applicable embedded derivatives, is $872 million higher (2020: $786 million higher) than its fair value. The intrinsic value of the embedded derivatives reflects the structured payoff of certain FVO deposit liabilities, which we hedge economically with derivatives and other FVTPL financial instruments.

### Note 4 Significant transactions

#### Acquisition of Canadian Costco credit card portfolio

On September 2, 2021, we announced that we entered into a long-term agreement to become the exclusive issuer of Costco-branded Mastercard credit cards in Canada. We will also acquire the existing Canadian Costco credit card portfolio, which has over $3 billion in outstanding balances. This transaction is expected to be completed in the first half of fiscal 2022, subject to customary closing conditions.

#### Sale of CIBC FirstCaribbean

On November 8, 2019, we announced that we had entered into a definitive agreement to sell 66.73% of the outstanding shares of CIBC FirstCaribbean to GNB Financial Group Limited (GNB) for total consideration of approximately US$797 million, subject to closing adjustments to reflect certain changes in CIBC FirstCaribbean's book value. The closing of this transaction would have resulted in CIBC retaining a 24.9% minority interest in CIBC FirstCaribbean.

In the fourth quarter of 2019, we recognized a goodwill impairment charge of $135 million as a result of the valuation implied from the definitive agreement with GNB. Commencing in the first quarter of 2020, the assets and liabilities of CIBC FirstCaribbean were treated as held for sale, and measured at the lower of their aggregate carrying amount and fair value less costs to sell, on the basis that the transaction was highly probable to close in 2020 subject to regulatory approvals. In the second quarter of 2020, we recognized an additional goodwill impairment charge of $28 million based on the estimated impact of the COVID-19 pandemic on the recoverable value of the 24.9% interest in CIBC FirstCaribbean that we expected to retain.

As a result of the lengthy regulatory review process, the worsening impact of the COVID-19 pandemic on the Caribbean economy and our revised expectations regarding the likelihood and timing of closing of a potential transaction, we concluded in the fourth quarter of 2020 that held for sale accounting was no longer appropriate. As a result, we were required to assess the recoverable amount of the remaining goodwill based on current market conditions rather than the definitive agreement with GNB. This assessment reflected revised expectations concerning the impact of the COVID-19 pandemic and led to the recognition of an additional goodwill impairment charge of $220 million.

On February 3, 2021, we announced that the proposed sale of CIBC FirstCaribbean to GNB did not receive regulatory approval and that the transaction will not proceed.

For additional information, see Note 9.

### Note 5 Securities

| Securities, $ millions, as at October 31 | 2021 | 2020 |
|---|---|---|
| Debt securities measured at FVOCI | \$ 53,161 | \$ 53,968 |
| Equity securities designated at FVOCI | 836 | 585 |
| Securities measured at amortized cost (1) | 35,159 | 31,800 |
| Securities mandatorily measured and designated at FVTPL | 72,245 | 62,693 |
| **Total** | **\$ 161,401** | **\$ 149,046** |

(1) During the year, $39 million of amortized cost debt securities were disposed of shortly before their maturity, resulting in a realized gain of less than $1 million (2020: a realized gain of $2 million).

| Residual term to contractual maturity | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| **Debt securities measured at FVOCI** | **Within 1 year** | **1 to 5 years** | **5 to 10 years** | **Over 10 years** | **No specific maturity** | **2021** | **2020** |
| | Carrying value | Yield (1) | Carrying value | Yield (1) | Carrying value | Yield (1) | Carrying value | Yield (1) | Carrying value | Yield (1) | Total Carrying value | Total Carrying value |
| Securities issued or guaranteed by: | | | | | | | | | | | | |
| Canadian federal government | \$ 2,516 | 0.9% | \$ 5,664 | 0.9% | \$ 160 | 1.8% | \$ 264 | 2.2% | \$ - | - % | \$ 8,340 | \$ 11,409 |
| Other Canadian governments | 5,684 | 0.2 | 7,508 | 1.8 | 6,156 | 2.3 | 261 | - % | 2.4 | 14,189 | 15,315 |
| U.S. Treasury and agencies | 3,259 | 0.5 | 3,303 | 0.6 | 155 | 5.2 | 58 | 5.9 | 12,596 | 0.7 |
| Other foreign governments | - | - | 401 | 1.0 | 321 | 2.5 | 823 | 1.1 | 1,765 | 0.7 |
| Mortgage-backed securities (2) | - | - | - | - | - | - | - | - | 2,368 | 1.4 |
| Asset-backed securities | - | - | - | - | - | - | - | - | 195 | 1.8 |
| Corporate debt | 1,765 | 0.7 | 5,672 | 0.4 | 381 | 0.5 | 15 | 3.6 | 7,833 | 0.5 | 6,224 | 0.7 |
| | **\$ 13,491** | | **\$ 30,865** | | **\$ 7,296** | | **\$ 1,509** | | **\$ 53,161** | | **\$ 53,968** |
| **Equity securities designated at FVOCI** | | | | | | | | | | | | |
| Corporate public equity | \$ - | - % | \$ - | - % | \$ - | - % | \$ - | - % | \$ 126 | n/m | \$ 126 | \$ 42 |
| Corporate private equity | - | - % | - | - % | 710 | n/m | - | - % | 710 | n/m | 543 |
| | **\$ 836** | | **\$ 585** |
| **Securities measured at amortized cost** | | | | | | | | | | | | |
| Securities issued or guaranteed by: | | | | | | | | | | | | |
| Canadian federal government | 398 | 1,234 | 36 | | | 1,668 | 790 |
| Other Canadian governments | 131 | 6,278 | 5,611 | 2,391 | 8,242 | 2,241 | 12,020 | 11,072 |
| U.S. Treasury and agencies | 152 | 167 | 31 | 12,874 | 10,968 |
| Other foreign governments | 1,343 | 1,541 | 274 | 1,062 | 362 | 657 | 3,412 | 3,954 |
| Mortgage-backed securities (3) | 2,472 | 1,062 | 362 | 657 | 3,803 |
| Asset-backed securities | 309 |
| Corporate debt | 4,181 | 3,803 |
| | **\$ 4,550** | **\$ 20,208** | **\$ 9,347** | **\$ 1,054** | | **\$ 35,159** | **\$ 31,800** |
| **Securities mandatorily measured and designated at FVTPL** | | | | | | | | | | | | |
| Securities issued or guaranteed by: | | | | | | | | | | | | |
| Canadian federal government | 2,193 | 2,218 | 909 | 3,132 | | 8,452 | 11,655 |
| Other Canadian governments | 1,136 | 2,025 | 1,075 | 6,098 | 10,334 | 9,783 |
| U.S. Treasury and agencies | 753 | 3,208 | 788 | 186 | 4,935 | 5,596 |
| Other foreign governments | 2,817 | 1,129 | 48 | 37 | 4,031 | 1,974 |
| Mortgage-backed securities (4) | 1 | 1,771 | 184 | 1 | 1,957 | 1,582 |
| Asset-backed securities | 97 | 190 | 39 | 7 | 333 | 571 |
| Corporate debt | 913 | 2,234 | 630 | 222 | 3,999 | 3,550 |
| | **\$ 7,910** | **\$ 12,775** | **\$ 3,673** | **\$ 9,683** | | **\$ 34,041** | **\$ 34,711** |
| Corporate public equity | | | | | | 38,204 | 27,982 |
| **Total securities (5)** | **\$ 25,951** | | **\$ 63,848** | | **\$ 20,316** | | **\$ 12,246** | | **\$ 39,040** | | **\$ 161,401** | **\$ 149,046** |

(1) Represents the weighted-average yield, which is determined by applying the weighted average of the yields of individual fixed income securities.
(2) Includes securities backed by mortgages insured by the Canada Mortgage and Housing Corporation (CMHC), with amortized cost of $301 million (2020: $410 million) and fair value of $303 million (2020: $413 million); securities issued by Federal National Mortgage Association (Fannie Mae), with amortized cost of $537 million (2020: $888 million) and fair value of $554 million (2020: $918 million); securities issued by Federal Home Loan Mortgage Corporation (Freddie Mac), with amortized cost of $235 million (2020: $367 million) and fair value of $243 million (2020: $380 million); and securities issued by Government National Mortgage Association, a U.S. government corporation (Ginnie Mae), with amortized cost of $443 million (2020: $655 million) and fair value of $445 million (2020: $657 million).
(3) Includes securities backed by mortgages insured by the CMHC, with amortized cost of $419 million (2020: $609 million) and fair value of $420 million (2020: $610 million); securities issued by Fannie Mae, with amortized cost of $838 million (2020: $1,165 million) and fair value of $851 million (2020: $1,197 million); securities issued by Freddie Mac, with amortized cost of $1,823 million (2020: $2,008 million) and fair value of $1,859 million (2020: $2,091 million); and securities issued by Ginnie Mae, with amortized cost of $39 million (2020: $69 million) and fair value of $40 million (2020: $71 million).
(4) Includes securities backed by mortgages insured by the CMHC of $1,954 million (2020: $1,547 million).
(5) Includes securities denominated in U.S. dollars with carrying value of $80.2 billion (2020: $68.4 billion) and securities denominated in other foreign currencies with carrying value of $4,611 million (2020: $2,616 million).
n/m Not meaningful.

| Fair value of debt securities measured and equity securities designated at FVOCI, $ millions, as at October 31 | 2021 | | | | 2020 | | | |
|---|---|---|---|---|---|---|---|---|
| | Cost/ Amortized cost (1) | Gross unrealized gains | Gross unrealized losses | Fair value | Cost/ Amortized cost (1) | Gross unrealized gains | Gross unrealized losses | Fair value |
| Securities issued or guaranteed by: | | | | | | | | |
| Canadian federal government | \$ 8,310 | \$ 31 | \$ (1) | \$ 8,340 | \$ 11,379 | \$ 32 | \$ (2) | \$ 11,409 |
| Other Canadian governments | 14,007 | 182 | | 14,189 | 15,187 | 128 | | 15,315 |
| U.S. Treasury and agencies | 14,157 | 23 | (53) | 14,127 | 12,533 | 63 | | 12,596 |
| Other foreign governments | 6,750 | 30 | (5) | 6,775 | 5,825 | 38 | (2) | 5,861 |
| Mortgage-backed securities | 1,516 | 29 | | 1,545 | 2,320 | 49 | (1) | 2,368 |
| Asset-backed securities | 354 | (2) | 352 | 197 | (2) | 195 |
| Corporate debt | 7,820 | 15 | (2) | 7,833 | 6,194 | 31 | (1) | 6,224 |
| Corporate public equity (2) | 52,914 | 310 | (63) | 53,161 | 53,635 | 341 | (8) | 53,968 |
| Corporate private equity | 67 | 60 | (1) | 126 | 30 | 15 | (3) | 42 |
| | 730 | 144 | (38) | 836 | 576 | 58 | (49) | 585 |
| | **\$ 53,644** | **\$ 454** | **\$ (101)** | **\$ 53,997** | **\$ 54,211** | **\$ 399** | **\$ (57)** | **\$ 54,553** |

(1) Net of allowance for credit losses for debt securities measured at FVOCI of $19 million (2020: $22 million).
(2) Includes restricted stock.

Fair value of equity securities designated at FVOCI that were disposed of during the year was $25 million (2020: $88 million). Net realized cumulative after-tax gains of $27 million for the year (2020: $93 million) were reclassified from AOCI to retained earnings, resulting from dispositions of equity securities designated at FVOCI and return on capital distributions from limited partnerships designated at FVOCI.

Dividend income recognized on equity securities designated at FVOCI that were still held as at October 31, 2021 was $5 million (2020: $5 million). Dividend income recognized on equity securities designated at FVOCI that were disposed of during the year was nil (2020: $2 million).

The table below presents profit or loss recognized on FVOCI securities:

| $ millions, for the year ended October 31 | 2021 | 2020 | 2019 |
|---|---|---|---|
| Realized gains | \$ 91 | \$ 30 | \$ 40 |
| Realized losses | (2) | (1) | (2) |
| (Provision for) reversal of credit losses on debt securities | 2 | (8) | (3) |
| **Allowance for credit losses** | **\$ 91** | **\$ 21** | **\$ 35** |

The following table provides a reconciliation of the opening balance to the closing balance of the ECL allowance for debt securities measured at FVOCI:

| $ millions, as at or for the year ended October 31 | Stage 1 | Stage 2 | Stage 3 | Total |
|---|---|---|---|---|
| **2021** | Collective provision 12-month ECL performing | Collective provision lifetime ECL performing | Collective and individual provision lifetime ECL credit-impaired | Total |
| Debt securities measured at FVOCI | | | | |
| Balance at beginning of year | \$ 18 | \$ 4 | \$ - | \$ 22 |
| Provision for (reversal of) credit losses (1) | (13) | 11 | - | (2) |
| Write-offs (3) | - | (1) | - | (1) |
| Foreign exchange and other | - | (1) | - | (1) |
| Balance at end of year | **\$ 5** | **\$ 14** | **\$ -** | **\$ 19** |
| **2020** | | | | |
| Debt securities measured at FVOCI | | | | |
| Balance at beginning of year | \$ 14 | \$ 3 | \$ 6 | \$ 23 |
| Provision for credit losses (1)(2) | 5 | 2 | 1 | 8 |
| Write-offs (3) | - | - | (7) (3) | (9) |
| Foreign exchange and other | - | - | - | - |
| Balance at end of year | **\$ 19** | **\$ 5** | **\$ -** | **\$ 22** |

(1) Included in the Gains (losses) from debt securities measured at FVOCI and amortized cost, net on our consolidated statement of income.
(2) Excludes stage 3 provisions for credit losses of $14 million for the year ended October 31, 2020 for originated credit-impaired amortized cost securities that are recognized in the Gains (losses) from debt securities measured at FVOCI and amortized cost, net on our consolidated statement of income.
(3) Includes ECL of $8 million relating to Barbados U.S. dollar denominated securities that were derecognized in the third quarter of 2020 as a result of a U.S. dollar denominated debt restructuring agreement completed with the Government of Barbados.

### Note 6 Loans (1)(2)

| $ millions, as at October 31 | Gross amount | Stage 3 allowance | Stages 1 and 2 allowance | Total allowance (3) | 2021 Total net | Gross amount | Stage 3 allowance | Stages 1 and 2 allowance | Total allowance (3) | 2020 Total net |
|---|---|---|---|---|---|---|---|---|---|---|
| **Residential mortgages (4)** | | | | | | | | | | |
| Exceptionally low | \$ 251,526 | \$ 158 | \$ 122 | \$ 280 | \$ 251,246 | \$ 221,165 | \$ 151 | \$ 212 | \$ 363 | \$ 220,802 |
| Very low | 49,958 | 106 | 662 | 768 | 41,129 | 42,222 | 113 | 719 | 832 | 41,390 |
| Low | 11,134 | 625 | 625 | 10,509 | 11,389 | 667 | 667 | 10,722 |
| Medium | 150,213 | 508 | 668 | 1,176 | 149,037 | 135,546 | 650 | 1,028 | 1,678 | 133,868 |
| High | - | - | - | - | - | 1,054 | - | - | - | 1,054 |
| Default | - | - | 443 | 443 | 654 | 654 |
| Not rated | 2,160 | 395 | 195 | 2,750 | 1,810 | 818 | 155 | 2,783 |
| Gross residential mortgages (4)(5) | **237,701** | **13,187** | **638** | **251,526** | **206,350** | **14,006** | **809** | **221,165** |
| ECL allowance | 59 | 63 | 158 | 280 | 51 | 161 | 151 | 363 |
| **Net residential mortgages** | **237,642** | **13,124** | **480** | **251,246** | **206,299** | **13,845** | **658** | **220,802** |
| **Personal** | | | | | | | | | | |
| Exceptionally low | 18,608 | 1 | 18,609 | 23,302 | 23,302 |
| Very low | 5,179 | 4 | 5,183 | 1,618 | 157 | 1,775 |
| Low | 8,091 | 4,389 | 12,480 | 8,662 | 2,497 | 11,159 |
| Medium | 990 | 2,773 | 3,763 | 1,265 | 2,768 | 4,033 |
| High | 252 | 803 | 1,055 | 331 | 769 | 1,100 |
| Default | 109 | 109 | 140 | 140 |
| Not rated | 585 | 60 | 53 | 698 | 513 | 159 | 41 | 713 |
| Gross personal (5) | **33,705** | **8,030** | **162** | **41,897** | **35,691** | **6,350** | **181** | **42,222** |
| ECL allowance | 125 | 537 | 106 | 768 | 179 | 540 | 113 | 832 |
| **Net personal** | **33,580** | **7,493** | **56** | **41,129** | **35,512** | **5,810** | **68** | **41,390** |
| **Credit card** | | | | | | | | | | |
| Exceptionally low | 2,065 | - | 2,065 | 3,285 | 3,285 |
| Very low | 715 | - | 715 | 1,388 | 1,388 |
| Low | 4,653 | 347 | 5,000 | 2,340 | 2,340 |
| Medium | 593 | 2,195 | 2,788 | 1,778 | 1,973 | 3,751 |
| High | - | 435 | 435 | 472 | 472 |
| Default | 123 | 8 | 131 | 135 | 18 | 153 |
| Gross credit card | **8,149** | **2,985** | | **11,134** | **8,926** | **2,463** | | **11,389** |
| ECL allowance | 127 | 498 | 625 | 125 | 18 | 153 |
| **Net credit card** | **8,022** | **2,487** | | **10,509** | **8,801** | **1,921** | | **10,722** |
| **Business and government (4)(6)** | | | | | | | | | | |
| Investment grade | 65,963 | 562 | 66,525 | 50,691 | 307 | 50,998 |
| Non-investment grade | 85,764 | 4,599 | 90,363 | 80,471 | 7,319 | 87,790 |
| Watch list | 67 | 2,985 | 3,052 | 4,291 | 4,738 |
| Default | 174 | 1,033 | 1,033 | 1,359 | 1,359 |
| Not rated | 24 | | 198 | 218 | 49 | 267 |
| Gross business and government (4)(7) | **151,968** | **8,170** | **1,033** | **161,171** | **131,827** | **11,966** | **1,359** | **145,152** |
| ECL allowance | 240 | 428 | 508 | 1,176 | 380 | 648 | 650 | 1,678 |
| **Net business and government** | **151,728** | **7,742** | **525** | **159,995** | **131,447** | **11,318** | **709** | **143,474** |
| **Total net amount of loans** | **\$ 430,972** | **\$ 30,846** | **\$ 1,061** | **\$ 462,879** | **\$ 382,059** | **\$ 32,894** | **\$ 1,435** | **\$ 416,388** |

(1) The table excludes debt securities measured at FVOCI, for which ECL allowances of $19 million (2020: $22 million) were recognized in AOCI. In addition, the table excludes debt securities classified at amortized cost, for which ECL allowances of $15 million were recognized as at October 31, 2021 (2020: $16 million), $13 million of which was stage 3 ECL allowance on originated credit-impaired amortized cost debt securities (2020: $14 million). Other financial assets classified at amortized cost were also excluded from the table above as their ECL allowances were immaterial as at October 31, 2021 and October 31, 2020. Financial assets other than loans that are classified as amortized cost are presented on our consolidated balance sheet net of ECL allowances.
(2) Excludes foreclosed assets of $18 million (2020: $23 million), which were included in Other assets on our consolidated balance sheet.
(3) As at October 31, 2021, 89% (2020: 93%) of stage 3 impaired loans were either fully or partially collateralized.
(4) Includes $16 million (2020: $63 million) of residential mortgages and $25,651 million (2020: $23,291 million) of business and government loans that are measured at FVTPL.
(5) The internal risk rating grades presented for residential mortgages and certain personal loans do not take into account loan guarantees or insurance issued by the Canadian government (federal or provincial), Canadian government agencies, or private insurers, as the determination of whether a significant increase in credit risk has occurred for these loans is based on relative changes in the loans' lifetime PD without considering collateral or other credit enhancements.
(6) Certain prior period amounts were restated.
(7) Includes customers' liability under acceptances of $10,958 million (2020: $9,606 million).

#### Undrawn credit facilities and other off-balance sheet exposures

| $ millions, as at October 31 | Stage 1 | Stage 2 | Stage 3 | 2021 Total | 2020 | Stage 1 | Stage 2 | Stage 3 | 2020 Total |
|---|---|---|---|---|---|---|---|---|---|
| **Retail** | | | | | | | | | |
| Exceptionally low | \$ 130,212 | \$ 12 | \$ - | \$ 130,224 | \$ 124,690 | \$ 8 | \$ - | \$ 124,698 |
| Very low | 12,868 | 59 | 12,927 | 6,632 | 137 | 6,769 |
| Low | 7,937 | 1,811 | 9,748 | 8,703 | 416 | 9,119 |
| Medium | 740 | 896 | 1,636 | 909 | 692 | 1,601 |
| High | 73 | 495 | 568 | 263 | 503 | 766 |
| Default | - | - | 34 | 34 | 28 | 28 |
| Not rated | 375 | 8 | 383 | 411 | 23 | 434 |
| Gross retail | **152,205** | **3,281** | **34** | **155,520** | **141,608** | **1,779** | **28** | **143,415** |
| ECL allowance | 34 | 29 | 63 | 36 | 36 | 72 |
| **Net retail** | **152,171** | **3,252** | **34** | **155,457** | **141,572** | **1,743** | **28** | **143,343** |
| **Business and government (1)** | | | | | | | | | | |
| Investment grade | 111,877 | 524 | 112,401 | 89,883 | 149 | 90,032 |
| Non-investment grade | 58,652 | 1,714 | 60,366 | 55,910 | 3,679 | 59,589 |
| Watch list | 19 | 734 | 753 | 91 | 1,665 | 1,756 |
| Default | 91 | 91 | 129 | 129 |
| Not rated | 346 | 9 | 355 | 795 | - | 170 |
| Gross business and government | **170,894** | **2,981** | **91** | **173,966** | **146,679** | **5,534** | **129** | **152,342** |
| ECL allowance | 37 | 21 | 58 | 73 | 35 | 2 | 110 |
| **Net business and government** | **170,857** | **2,960** | **91** | **173,908** | **146,606** | **5,499** | **127** | **152,232** |
| **Total net undrawn credit facilities and other off-balance sheet exposures** | **\$ 323,028** | **\$ 6,212** | **\$ 125** | **\$ 329,365** | **\$ 288,178** | **\$ 7,242** | **\$ 155** | **\$ 295,575** |

(1) Certain prior period amounts were restated.

#### Net interest income after provision for credit losses

| $ millions, for the year ended October 31 | 2021 | 2020 | 2019 |
|---|---|---|---|
| Interest income | \$ 14,741 | \$ 17,522 | \$ 20,697 |
| Interest expense | 3,282 | 6,478 | 10,146 |
| **Net interest income** | **11,459** | **11,044** | **10,551** |
| Provision for (reversal of) credit losses | 158 | 2,489 | 1,286 |
| **Net interest income after provision for credit losses** | **\$ 11,301** | **\$ 8,555** | **\$ 9,265** |

#### Modified financial assets and client relief programs

During the early stages of the pandemic, CIBC had been actively engaged in lending activities to support our clients who were experiencing financial hardship caused by the COVID-19 pandemic, including payment deferral options offered on cards, residential mortgages, personal lending products, and business and government loans. Modification gains or losses resulting from client relief programs were not significant.

As part of CIBC's usual lending business, from time to time we may modify the contractual terms of loans classified as stage 2 and stage 3 for which the borrower has experienced financial difficulties, through the granting of a concession in the form of below-market rates or terms that we would not otherwise have considered.

During the year ended October 31, 2021, loans classified as stage 2 or stage 3 with an amortized cost of $654 million (2020: $10,498 million) were either modified through the granting of a financial concession in response to the borrower having experienced financial difficulties or were subject to the client relief programs in response to COVID-19, in each case before the time of modification or deferral. In addition, the gross carrying amount of previously modified or deferred stage 2 or stage 3 loans that have returned to stage 1 during the year ended October 31, 2021 was $1,461 million (2020: $5,287 million).

### Note 7 Structured entities and derecognition of financial assets

#### Structured entities

SEs are entities that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. SEs are entities that are created to accomplish a narrow and well-defined objective. CIBC is involved with various types of SEs for which the business activities include securitization of financial assets, asset-backed financings, and asset management.

We consolidate a SE when the substance of the relationship indicates that we control the SE.

##### Consolidated structured entities

We consolidate the following SEs:

###### Credit card securitization trust

We sell an ownership interest in a revolving pool of credit card receivables generated under certain credit card accounts to Cards II Trust (Cards II), which purchases a proportionate share of credit card receivables on certain credit card accounts, with the proceeds received from the issuance of notes. We consolidate this trust because we have the power to direct the relevant activities and have exposure to substantially all the variability of returns for the excess spread (the deferred purchase price) that we receive over time.

Our credit card securitizations are revolving securitizations, with credit card receivable balances fluctuating from month to month as credit card clients repay their balances and new receivables are generated.

The notes are presented as Secured borrowings within Deposits on the consolidated balance sheet.

As at October 31, 2021, $1.7 billion of credit card receivable assets with a fair value of $1.7 billion (2020: $1.7 billion with a fair value of $1.7 billion) supported associated funding liabilities of $1.7 billion with a fair value of $1.7 billion (2020: $1.7 billion with a fair value of $1.7 billion).

###### Covered bond guarantor

Under the Legislative Covered Bond Programme, we transfer a pool of conventional uninsured mortgages to the CIBC Covered Bond (Legislative) Guarantor Limited Partnership (the Guarantor LP). The Guarantor LP holds interest and title to these transferred mortgages and serves to guarantee payment of principal and interest to bondholders. The covered bond liabilities are on-balance sheet obligations that are fully collateralized by the mortgage assets over which bondholders enjoy a priority claim in the event of CIBC's insolvency. We consolidate this entity because we have the ability to direct the relevant activities and retain substantially all of the variability of returns on the underlying mortgages.

As at October 31, 2021, our Legislative Covered Bond Programme had outstanding covered bond liabilities of $23.8 billion with a fair value of $24.0 billion (2020: $19.6 billion with a fair value of $19.7 billion).

###### CIBC-managed investment funds

We establish and manage investment funds such as mutual funds and pooled funds. We act as an investment manager and earn market-based management fees, and for certain pooled funds, performance fees which are generally based on the performance of the funds. Seed capital is provided from time to time to CIBC-managed investment funds for initial launch. We consolidate those investment funds in which we have power to direct the relevant activities of the funds and in which our seed capital, or our units held, are significant relative to the total variability of returns of the funds such that we are deemed to be a principal rather than an agent. As at October 31, 2021, the total assets and non-controlling interests in consolidated CIBC-managed investment funds were $50 million and $14 million, respectively (2020: $7 million and $3 million, respectively).

Non-controlling interests in consolidated CIBC-managed investment funds are included in Other liabilities as the investment fund units are mandatorily redeemable at the option of the investor.

###### Community-based tax-advantaged investments

We sponsor certain SEs that invest in community development projects in the U.S. through the issuance of below-market loans that generate a return primarily through the realization of tax credits. As at October 31, 2021, the program had outstanding loans of $92 million (2020: $75 million). We consolidate these entities because we have the ability to direct the relevant activities and retain substantially all of the variability of returns on the underlying loans.

##### Non-consolidated structured entities

The following SEs are not consolidated by CIBC because we do not have control over these SEs:

###### Single-seller and multi-seller conduits

We manage and administer a single-seller conduit and several CIBC-sponsored multi-seller conduits in Canada. The multi-seller conduits acquire direct or indirect ownership or security interests in pools of financial assets from our clients and finance the acquisitions by issuing asset-backed commercial paper (ABCP) to investors. The single-seller conduit acquires financial assets and finances these acquisitions through a credit facility provided by a syndicate of financial institutions. The sellers to the conduits may continue to service the assets and may be exposed to credit losses realized on these assets, typically through the provision of over-collateralization or another form of credit enhancement. The conduits may also obtain credit enhancement from third-party providers. As at October 31, 2021, the total assets in the single-seller conduit and multi-seller conduits amounted to $0.6 billion and $7.6 billion, respectively (2020: $0.5 billion and $8.4 billion, respectively).

We generally provide the multi-seller conduits with commercial paper backstop liquidity facilities, securities distribution, and provide both the single and multi-seller conduits with accounting, cash management, and operations services. The liquidity facilities for the managed and administered multi-seller conduits require us to provide funding, subject to the satisfaction of certain conditions with respect to the conduits, for ABCP not placed with external investors. We also may purchase ABCP issued by the multi-seller conduits for market-making purposes.

We are required to maintain certain short-term and/or long-term debt ratings with respect to the liquidity facilities that we provide to the sponsored multi-seller conduits. If we are downgraded below the level specified under the terms of those facilities, we must procure an alternative liquidity provider that meets the minimum rating requirements.

We may also act as the counterparty to derivative contracts entered into by a multi-seller conduit in order to convert the yield of the underlying assets to match the needs of the multi-seller conduit's investors or to mitigate the interest rate, basis, and currency risk within the conduit. All fees earned in respect of activities with the conduits are on a market basis.

###### Third-party structured vehicles

We have investments in and provide loans, liquidity and credit facilities to third-party SEs. We also have investments in limited partnerships in which we generally are a passive investor of the limited partnerships as a limited partner, and in some cases, we are the co-general partner and have significant influence over the limited partnerships. Similar to other limited partners, we are obligated to provide funding up to our commitment level to these limited partnerships.

###### Loan Warehouse Financing

We provide interim senior financing to third-party SEs for the purpose of future securitization. The SE is established by a third-party investor, who provides the initial investment into the SE (the equity investors). The senior financing enables the SE to purchase a loan portfolio at the direction of a collateral manager during the warehousing phase of the securitization. When the securitization transaction closes, the senior lenders are repaid by proceeds from the issuance of debt securities to investors.

###### Community Reinvestment Act investments

We hold debt and equity investments in limited liability entities to further our U.S. Community Reinvestment Act initiatives with a carrying value of $338 million (2020: $328 million). These entities invest in qualifying community development projects, including affordable housing projects that generate a return primarily by the realization of tax credits. Similar to other limited investors in these entities, we are obligated to provide funding up to our commitment level to these limited liability entities. As at October 31, 2021, the total assets of these limited liability entities were $5.9 billion (2020: $5.2 billion).

###### CIBC Capital Trust

We had issued senior deposit notes to CIBC Capital Trust, which funded the purchase of these notes through the issuance of CIBC Tier 1 Notes – Series B (Notes) that match the term of the senior deposit notes. The Notes were eligible for Tier 1 regulatory capital treatment and were subject to the phase-out rules for capital instruments that would be viewed as non-qualifying capital instruments.

On November 1, 2021, CIBC Capital Trust redeemed all $300 million of its 10.25% Notes. As a result of the redemption of the Notes by CIBC Capital Trust, CIBC redeemed the corresponding senior deposit notes issued by CIBC to CIBC Capital Trust on November 1, 2021. See Note 17 for additional details.

###### CIBC-managed investment funds

As indicated above, we establish investment funds, including mutual funds and pooled funds, to provide clients with investment opportunities and we may receive management fees and performance fees. We may hold insignificant amounts of fund units in these CIBC-managed funds. We do not consolidate these funds if we do not have significant variability of returns from our interests in these funds such that we are deemed to be an agent through our capacity as the investment manager, rather than a principal. We do not guarantee the performance of CIBC-managed investment funds. As at October 31, 2021, the total AUM in the non-consolidated CIBC-managed investment funds amounted to $152.5 billion (2020: $125.2 billion).

###### CIBC structured collateralized debt obligation (CDO) vehicles

We hold exposures to structured CDO vehicles through investments in, or written credit derivatives referencing, these structured vehicles. The structured vehicles are funded through the issuance of senior and subordinated tranches. We may hold a portion of those senior and/or subordinated tranches.

We previously 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. As at October 31, 2021, the assets in the CIBC structured CDO vehicles have a total principal amount of $181 million (2020: $214 million).

Our on-balance sheet amounts and maximum exposure to loss related to SEs that are not consolidated are set out in the table below. The maximum exposure comprises the carrying value of unhedged investments, the notional amounts for liquidity and credit facilities, and the notional amounts less accumulated fair value losses for unhedged written credit derivatives on SE reference assets. The impact of CVA is not considered in the table below.

| $ millions, as at October 31, 2021 | Single-seller and multi-seller conduits | Third-party structured vehicles | Loan Warehouse Financing | Other (1) |
|---|---|---|---|---|
| **On-balance sheet assets at carrying value (2)** | | | | |
| Securities | \$ 35 | \$ 1,621 | \$ - | \$ 393 |
| Loans | 106 | 2,217 | 3,245 | - |
| Investments in equity-accounted associates and joint ventures | - | - | - | 1 |
| | **\$ 141** | **\$ 3,838** | **\$ 3,245** | **\$ 394** |
| **October 31, 2020** | | | | |
| **On-balance sheet assets at carrying value (2)** | \$ 107 | \$ 3,165 | \$ 395 | \$ 343 |
| **On-balance sheet liabilities at carrying value (2)** | | | | |
| Deposits | \$ - | \$ - | \$ - | \$ 300 |
| Derivatives (3) | 54 | - | - | 354 |
| **October 31, 2020** | \$ - | \$ - | \$ - | \$ 410 |
| **Maximum exposure to loss, net of hedges** | | | | |
| Investments and loans | \$ 141 | \$ 3,838 | \$ 3,245 | \$ 394 |
| Notional of written derivatives, less fair value losses | 33 | - | - | - |
| Liquidity, credit facilities and commitments | 7,539 (4) | 2,016 | 921 | 129 |
| Less: hedges of investments, loans and written derivatives exposure | (36) | - | - | - |
| | **\$ 7,680** | **\$ 5,854** | **\$ 4,166** | **\$ 520** |
| **October 31, 2020** | **\$ 8,497** | **\$ 5,682** | **\$ 758** | **\$ 492** |

(1) Includes Community Reinvestment Act-related investment vehicles, CIBC Capital Trust, CIBC-managed investment funds, CIBC structured CDO vehicles and third-party structured vehicles related to structured credit run-off.
(2) Excludes SEs established by CMHC, Fannie Mae, Freddie Mac, Ginnie Mae, FHLB, Federal Farm Credit Bank, and Student Loan Marketing Association.
(3) Comprises written credit default swaps (CDS) and total return swaps (TRS) under which we assume exposures. Excludes foreign exchange derivatives, interest rate derivatives and other derivatives provided as part of normal client facilitation.
(4) Excludes an additional $3.0 billion (2020: $2.1 billion) relating to our backstop liquidity facilities provided to the multi-seller conduits as part of their commitment to fund purchases of additional assets. Also excludes $35 million (2020: $12 million) of our direct investments in the multi-seller conduits which we consider investment exposure.

We also hold investments in a variety of third-party investment funds, which include, but are not limited to, exchange-traded funds, mutual funds, and investment trusts. We buy and sell units of these investment funds as part of trading activities or client facilitation businesses that are managed as part of larger portfolios. We generally are a passive investor and are not the investment manager in any of these investment funds. We are not the sponsor of any third-party investment funds, nor do we have the power over key decision-making activities of the funds. Our maximum exposure to loss from our investments is limited to the carrying amounts of our investments and any unutilized commitment we have provided to these funds. In addition, we issue certain structured notes and enter into equity derivatives that are referenced to the return of certain investment funds. Accordingly, we do not include our interests in these third-party investment funds in the table above.

##### Derecognition of financial assets

We enter into transactions in the normal course of business in which we transfer recognized financial assets directly to third parties, but retain substantially all of the risks and rewards of those assets. The risks include credit, interest rate, foreign exchange, pre-payment and other price risks whereas the rewards include income streams associated with the assets. Due to the retention of risks, the transferred financial assets are not derecognized and such transfers are accounted for as secured borrowing transactions.

The majority of our financial assets transferred to non-consolidated entities that do not qualify for derecognition are: (i) residential mortgage loans under securitization transactions; (ii) securities held by counterparties as collateral under repurchase agreements; and (iii) securities lent under securities lending agreements.

###### Residential mortgage securitizations

We securitize fully insured fixed- and variable-rate residential mortgage pools through the creation of National Housing Act (NHA) MBS under the NHA MBS Program, sponsored by CMHC. Under the Canada Mortgage Bond Program, sponsored by CMHC, we sell MBS to a government-sponsored securitization trust that issues securities to investors. We do not consolidate the securitization trust. We may act as a counterparty in interest rate swap agreements where we pay the trust the interest due to investors and receive the interest on the MBS. We have also sold MBS directly to CMHC under the Government of Canada's Insured Mortgage Purchase Program.

The sale of mortgage pools that comprise the NHA MBS does not qualify for derecognition as we retain pre-payment, credit, and interest rate risks associated with the mortgages, which represent substantially all the risks and rewards. As a result, the mortgages remain on our consolidated balance sheet and are carried at amortized cost. We also recognize the cash proceeds from the securitization as Deposits - Secured borrowings.

###### Securities held by counterparties as collateral under repurchase agreements

We enter into arrangements whereby we sell securities but enter into simultaneous arrangements to repurchase the securities at a fixed price on a future date thereby retaining substantially all the risks and rewards. As a result, the securities remain on our consolidated balance sheet.

###### Securities lent for cash collateral or for securities collateral

We enter into arrangements whereby we lend securities but with arrangements to receive the securities at a future date, thereby retaining substantially all the risks and rewards. As a result, the securities remain on our consolidated balance sheet.

The following table provides the carrying amount and fair value of transferred financial assets that did not qualify for derecognition and the associated financial liabilities:

| $ millions, as at October 31 | Carrying amount | Fair value | Carrying amount | Fair value |
|---|---|---|---|---|
| **2021** | | | | |
| Residential mortgage securitizations (1) | \$ 17,121 | \$ 17,023 | \$ 17,550 | \$ 17,726 |
| Securities held by counterparties as collateral under repurchase agreements (2) | 36,469 | 36,469 | 36,720 | 36,720 |
| Securities lent for cash collateral (2) | 31,548 | 31,548 | 20,226 | 20,226 |
| Securities lent for securities collateral (2) | 1 | 1 | 13 | 13 |
| **Associated liabilities (3)** | **\$ 85,139** | **\$ 85,041** | **\$ 74,509** | **\$ 74,685** |
| | **\$ 85,061** | **\$ 85,122** | **\$ 75,853** | **\$ 76,080** |

(1) Consists mainly of Canadian residential mortgage loans transferred to Canada Housing Trust. Certain cash in transit balances related to the securitization process amounting to $792 million (2020: $1,148 million) have been applied to reduce these balances.
(2) Does not include over-collateralization of assets pledged. Repurchase and securities lending arrangements are conducted with both CIBC-owned and third-party assets on a pooled basis. The carrying amounts represent an estimated allocation related to the transfer of our own financial assets.
(3) Includes the obligation to return off-balance sheet securities collateral on securities lent and fair value hedge basis adjustments.

### Note 23 Contingent liabilities and provisions

In the ordinary course of its business, CIBC is a party to a number of legal proceedings, including regulatory investigations, in which claims for substantial monetary damages are asserted against CIBC and its subsidiaries. Legal provisions are established if, in the opinion of management, it is both probable that an outflow of economic benefits will be required to resolve the matter, and a reliable estimate can be made of the amount of the obligation. If the reliable estimate of probable loss involves a range of potential outcomes within which a specific amount appears to be a better estimate, that amount is accrued. If no specific amount within the range of potential outcomes appears to be a better estimate than any other amount, the mid-point in the range is accrued. In some instances, however, it is not possible either to determine whether an obligation is probable or to reliably estimate the amount of loss, in which case no accrual can be made.

While there is inherent difficulty in predicting the outcome of legal proceedings, based on current knowledge and in consultation with legal counsel, we do not expect the outcome of these matters, individually or in aggregate, to have a material adverse effect on our consolidated financial statements. However, the outcome of these matters, individually or in aggregate, may be material to our operating results for a particular reporting period. We regularly assess the adequacy of CIBC's litigation accruals and make the necessary adjustments to incorporate new information as it becomes available.

CIBC considers losses to be reasonably possible when they are neither probable nor remote. It is reasonably possible that CIBC may incur losses in addition to the amounts recorded when the loss accrued is the mid-point of a range of reasonably possible losses, or the potential loss pertains to a matter in which an unfavourable outcome is reasonably possible but not probable.

CIBC believes the estimate of the aggregate range of reasonably possible losses, in excess of the amounts accrued, for its significant legal proceedings, where it is possible to make such an estimate, is from nil to approximately $1.1 billion as at October 31, 2021. This estimated aggregate range of reasonably possible losses is based upon currently available information for those significant proceedings in which CIBC is involved, taking into account CIBC's best estimate of such losses for those cases for which an estimate can be made. CIBC's estimate involves significant judgment, given the varying stages of the proceedings and the existence of multiple defendants in many of such proceedings whose share of the liability has yet to be determined. The range does not include potential punitive damages and interest. The matters underlying the estimated range as at October 31, 2021 consist of the significant legal matters disclosed below. The matters underlying the estimated range will change from time to time, and actual losses may vary significantly from the current estimate. For certain matters, CIBC does not believe that an estimate can currently be made as many of them are in preliminary stages and certain matters have no specific amount claimed. Consequently, these matters are not included in the range.

The following is a description of CIBC's significant legal proceedings, which we intend to vigorously defend.

* **Green v. Canadian Imperial Bank of Commerce, et al.** In July 2008, a shareholder plaintiff commenced this proposed class action in the Ontario Superior Court of Justice against CIBC and several former and current CIBC officers and directors. It alleges that CIBC and the individual officers and directors violated the Ontario Securities Act through material misrepresentations and non-disclosures relating to CIBC's exposure to the U.S. sub-prime mortgage market. The plaintiffs instituted this action on behalf of all CIBC shareholders in Canada who purchased shares between May 31, 2007 and February 28, 2008. The action seeks damages of $5 billion. In July 2012, the plaintiffs' motions for leave to file the statement of claim and for class certification were dismissed by the Ontario Superior Court of Justice. In February 2014, the Ontario Court of Appeal released its decision overturning the lower court and allowing the matter to proceed as a certified class action. In August 2014, CIBC and the individual defendants were granted leave to appeal to the Supreme Court of Canada. The defendants' appeal to the Supreme Court of Canada was heard in February 2015. In December 2015, the Supreme Court of Canada upheld the Ontario Court of Appeal's decision allowing the matter to proceed as a certified class action. The trial, which was scheduled to start in October 2021, has been adjourned. A settlement agreement has been reached, subject to court approval. Pursuant to the proposed settlement, CIBC will pay the plaintiffs $125 million.
* **Fresco v. Canadian Imperial Bank of Commerce** **Gaudet v. Canadian Imperial Bank of Commerce** In June 2007, two proposed class actions were filed against CIBC in the Ontario Superior Court of Justice (Fresco) and in the Quebec Superior Court (Gaudet). Each makes identical claims for unpaid overtime for full-time, part-time, and retail frontline non-management employees. The Ontario action seeks $500 million in damages plus $100 million in punitive damages for all employees in Canada, while the Quebec action is limited to employees in Quebec and has been stayed pending the outcome of the Ontario action. In June 2009, in the Ontario action, the motion judge denied certification of the matter as a class action. In September 2010, the Ontario Divisional Court upheld the motion judge's denial of the plaintiff's certification motion and the award of costs to CIBC by a two-to-one majority. In January 2011, the Ontario Court of Appeal granted the plaintiff leave to appeal the decision denying certification. In June 2012, the Ontario Court of Appeal overturned the lower court and granted certification of the matter as a class action. The Supreme Court of Canada released its decision in March 2013 denying CIBC leave to appeal certification of the matter as a class action, and denying the plaintiff's cross appeal on aggregate damages. The motions for summary judgment were heard in December 2019. In March 2020, the court found CIBC liable for unpaid overtime. CIBC has appealed the liability decision. A decision on remedies was released in August 2020 and the court certified aggregate damages as a common issue and directed that the availability and quantum, if any, of aggregate damages be determined at a later date. The plaintiffs' claim for punitive damages was dismissed. In October 2020, the court released its decision on limitation periods finding that limitation periods cannot be determined on a class wide basis. CIBC has appealed the decisions on remedies and limitation periods. The appeal was heard in September 2021. The court reserved its decision.
* **Credit card class actions - Interchange fees litigation:**
    * **Bancroft-Snell v. Visa Canada Corporation, et al.**
    * **9085-4886 Quebec Inc. v. Visa Canada Corporation, et al.**
    * **Watson v. Bank of America Corporation, et al.**
    * **Fuze Salon v. BofA Canada Bank, et al.**
    * **1023926 Alberta Ltd. v. Bank of America Corporation, et al.**
    * **The Crown & Hand Pub Ltd. v. Bank of America Corporation, et al.**
    * **Hello Baby Equipment Inc. v. BofA Canada Bank, et al.**
    Since 2011, seven proposed class actions have been commenced against VISA Canada Corporation (Visa), MasterCard International Incorporated (MasterCard), CIBC and numerous other financial institutions. The actions, brought on behalf of all merchants who accepted payment by Visa or MasterCard from March 23, 2001 to the present, allege two "separate, but interrelated" conspiracies: one in respect of Visa and one in respect of MasterCard. The claims allege that Visa and MasterCard conspired with their issuing banks to set default interchange rate and merchant discount fees and that certain rules (Honour All Cards and No Surcharge) have the effect of increasing the merchant discount fees. The claims allege civil conspiracy, violation of the Competition Act, interference with economic interests and unjust enrichment. The claims seek unspecified general and punitive damages. The motion for class certification in Watson was granted in March 2014. The appeal of the decision granting class certification was heard in December 2014. In August 2015, the British Columbia Court of Appeal allowed the appeals in part, resulting in certain causes of action being struck and others being reinstated. The matter remains certified as a class action. The trial in Watson which was scheduled to commence in October 2020 has been adjourned. The motion for class certification in 9085-4886 Quebec Inc. (formerly Bakopanos) was heard in November 2017. In February 2018, the Court certified 9085-4886 Quebec Inc. as a class action. In May 2019, the plaintiffs' appeal of the certification decision in 9085-4886 Quebec Inc. was heard and in July 2019, the Quebec Court of Appeal allowed the plaintiffs' appeal. Five of the seven actions have been settled subject to court approval. The motions for court approval of the settlement are scheduled for December 2021. The remaining two actions will be stayed. CIBC will contribute towards a proposed settlement.
* **Mortgage prepayment class actions:**
    * **Jordan v. CIBC Mortgages Inc.**
    * **Lamarre v. CIBC Mortgages Inc.**
    * **Sherry v. CIBC Mortgages Inc.**
    * **Haroch v. Toronto Dominion Bank, et al.**
    In 2011, three proposed class actions were filed in the Superior Courts of Ontario (Jordan), Quebec (Lamarre) and British Columbia (Sherry) against CIBC Mortgages Inc. The representative plaintiffs allege that since 2005, CIBC Mortgages Inc. wrongfully charged or overcharged mortgage prepayment penalties and that the calculation clauses in the mortgage contract that provide for discretion in applying the prepayment penalties are void and unenforceable at law. The motion for class certification in Sherry was granted in June 2014 conditional on the plaintiffs framing a workable class definition. In July 2014, CIBC filed a Notice of Appeal. CIBC's appeal of the certification decision in Sherry was heard in April 2016. In June 2016, the British Columbia Court of Appeal allowed the appeal in Sherry in part, resulting in certain causes of action being struck. Sherry remains certified as a class action, and continuation of the certification motion on the amended pleading was heard November 2017. In August 2018, the court certified certain of the plaintiffs' causes of action in Sherry. The appeal in Sherry was heard in April 2019. In May 2020, the court dismissed CIBC's appeal. The certification motion in Jordan was heard in August 2018. In February 2019, the court certified Jordan as a class action. CIBC's motion for leave to appeal the certification decision in Jordan was denied in June 2019.
    In May 2018, a new proposed class action, Haroch, was filed in the Superior Court of Quebec against CIBC, CIBC Mortgages Inc. and several other financial institutions. The action is brought on behalf of Quebec residents who during the class period allegedly paid a mortgage prepayment charge in excess of three months' interest. The plaintiffs allege that the defendants created complex prepayment formulas that are contrary to the Quebec Civil Code, the Quebec Consumer Protection Act and the Interest Act and seek damages back to 2015. Haroch and Lamarre have been consolidated. The motion for class certification in Haroch was heard in June 2019 and in July 2019, the court certified the matter as a class action against CIBC and CIBC Mortgages Inc. CIBC and CIBC Mortgages Inc. sought leave to appeal the certification decision. The Jordan and Sherry actions have been settled subject to court approval, for which hearings are scheduled for February 2022. The appeal of the certification decision in Haroch did not proceed as the matter has been settled against CIBC, subject to court approval.
* **Cerberus Capital Management L.P. v. CIBC** In November 2015, Securitized Asset Funding 2011-2, LTD., a special purpose investment vehicle affiliated with Cerberus Capital Management L.P. (collectively, Cerberus), commenced a New York State Court action against CIBC seeking unspecified damages of "at least hundreds of millions of dollars". The action relates to two transactions in 2008 and 2011 in which CIBC issued a limited recourse note and certificate to Cerberus which significantly reduced CIBC's exposure to the U.S. residential real estate market. The complaint alleges that CIBC breached its contracts with Cerberus by failing to appropriately calculate and pay with respect to two of the payment streams due under the 2008 note and 2011 certificate. In January 2016, CIBC served its answer denying Cerberus' allegations and asserting counterclaims. Pre-trial discovery was completed and the parties filed a Note of Issue and Certificate of Readiness for Trial in August 2021. In September 2021, CIBC filed a motion for summary judgment, which is scheduled to be heard in December 2021. A non-jury trial is scheduled to commence in March 2022.
* **Valeant class actions:**
    * **Catucci v. Valeant Pharmaceuticals International Inc., et al.**
    * **Potter v. Valeant Pharmaceuticals International Inc., et al.**
    In March 2016, a proposed class action was filed in the Quebec Superior Court on behalf of purchasers of shares in Valeant Pharmaceuticals International Inc. against the issuer, its directors and officers, its auditors and the underwriting syndicates for six public offerings from 2013 to 2015. CIBC World Markets Corp. was part of the underwriting syndicate for three of the offerings (underwriting 1.5% of a US$1.6 billion offering in June 2013, 1.5% of a US$900 million offering in December 2013 and 0.625% of an offering comprising US$5.25 billion and €1.5 billion in March 2015). The proposed class action alleges various misrepresentations on the part of Valeant and the other defendants, including representations made in the prospectus of the public offerings, relating to Valeant's relationships with various "specialty pharmacies" who were allegedly acting improperly in the distribution of Valeant's products resulting in Valeant's operational results, revenues, and share price during the relevant period being artificially inflated. In July 2016, a similar proposed class action (Potter v. Valeant Pharmaceuticals International Inc., et al.) was commenced in New Jersey Federal Court. The motion for class certification in Catucci and motion to dismiss in Potter were heard in April 2017. In September 2017, the court certified Catucci as a class action. The defendants sought leave to appeal the certification decision, which was dismissed in December 2017. In Potter, the court dismissed the action against the underwriters, without prejudice to the plaintiff to re-plead its allegations. In November 2020, the Catucci class action was settled. The underwriters did not contribute to the settlement. This matter is now closed.
* **Pilon v. Amex Bank of Canada, et al.** In January 2018, a proposed class action was commenced in Quebec against CIBC and several other financial institutions. The action alleges that the defendants breached the Quebec Consumer Protection Act and the Bank Act when they unilaterally increased the credit limit on the plaintiffs' credit cards. The claim seeks the return of all over limit fees charged to Quebec customers beginning in January 2015 as well as punitive damages of $500 per class member. The motion for class certification was heard in April 2019. In August 2019, the court dismissed the certification motion. The plaintiff's appeal of the decision denying certification was heard in February 2021. In March 2021, the court dismissed the plaintiff's appeal. In May 2021, the plaintiff filed a motion seeking leave to appeal to the Supreme Court of Canada.
* **Simplii privacy class actions:**
    * **Bannister v. CIBC (formerly John Doe v. CIBC)**
    * **Steinman v. CIBC**
    In June 2018, two proposed class actions were filed in the Ontario Superior Court against CIBC on behalf of Simplii Financial clients who allege their personal information was disclosed as a result of a security incident in May 2018. The actions allege that Simplii Financial failed to protect its clients' personal information. The Bannister proposed class action seeks aggregated damages of approximately $550 million, while the Steinman proposed class action, which has been stayed, sought damages per class member plus punitive damages of $20 million. The motion for certification in Bannister, which was scheduled for December 2019, was adjourned. In April 2021, the court approved the settlement in the Bannister and Steinman actions. Pursuant to the settlement, CIBC agreed to pay $2 million to settle these actions. This matter is now closed.
* **Order Execution Only class actions:**
    * **Pozgaj v. CIBC and CIBC Trust**
    * **Frayce v. BMO Investorline Inc., et al**
    * **Michaud v. BBS Securities Inc. et al**
    In September 2018, a proposed class action (Pozgaj) was filed in the Ontario Superior Court against CIBC and CIBC Trust. It alleges that the defendants should not have paid mutual fund trailing commissions to order-execution-only-dealers. The action is brought on behalf of all persons who held units of CIBC mutual funds through order-execution-only-dealers and seeks $200 million in damages.
    In 2020, two proposed class action were filed in the Ontario Superior Court (Frayce) and the Supreme Court of British Columbia (Michaud) against CIBC Investor Services Inc. and several other dealers. The proposed actions allege that the defendants should not have received and accepted trailing commissions for service and advice on mutual funds purchased through their respective order-execution-only-dealers. The proposed actions are brought on behalf of all persons who purchased units of mutual funds through an order-execution-only-dealer owned by one or more of the defendants and seeks unspecified compensatory and punitive damages. The motion for class certification in Frayce is scheduled for February 2022, and the Michaud action has been stayed.
* **York County on Behalf of the County of York Retirement Fund v. Rambo, et al.** In February 2019, a class action complaint was filed in the Northern District of California against the directors, certain officers and the underwriters of several senior note offerings of the Pacific Gas and Electric Company (PG&E) that took place between March 2016 and April 2018, the total issuance amount for the series of offerings being approximately US$4 billion. CIBC World Markets Corp. was part of the underwriting syndicate for an offering, whereby CIBC World Markets Corp. underwrote 6% of a US$650 million December 2016 issuance of senior notes. The offering involved the issuance of two tranches of notes: US$400 million of 30-year senior notes maturing in December 2046 and US$250 million of one-year floating rate notes that matured and were repaid in November 2017. The complaint alleges that the disclosure documentation associated with the note offerings contained misrepresentations and/or omissions of material facts, including with respect to PG&E's failure to comply with various safety regulations, vegetation management programs and requirements, as well as understating the extent to which its equipment has allegedly caused multiple fires in California, including before the wildfires that occurred in California in 2017 and 2018. In October 2019, the defendants filed a motion to dismiss.
* **Pope v. CIBC and CIBC Trust** In August 2020, a proposed class action was filed in the Supreme Court of British Columbia against CIBC and CIBC Trust. The action alleges that the defendants misrepresented their investment strategy and charged unitholders excess fees in relation to the CIBC Canadian Equity Fund and certain CIBC portfolio funds. The action is brought on behalf of all persons who hold or held units of these funds from January 2005 to present and seeks unspecified compensatory and punitive damages. In December 2020, CIBC Asset Management Inc. was added as a defendant. The motion for class certification was heard in August 2021 and taken under reserve.
* **Salko v. CIBC Investor Services Inc. et al** In March 2021, a proposed class action was commenced in Quebec against CIBC Investor Services Inc. and several other financial institutions. The plaintiff subsequently added CIBC World Markets Inc. and additional financial institutions as defendants. The action seeks the reimbursement of currency conversion fees alleged to have been unlawfully charged to class members and concealed by the defendants, as well as exemplary and punitive damages. The plaintiff seeks reimbursement of fees charged to clients since March 15, 2018, as well as punitive damages in the amount of 5% of the total sum of fees charged to class members, plus interest. The motion for class certification is scheduled for April 2022.
* **The Registered Retirement Savings Plan (RRSP) of J.T.G v. Her Majesty The Queen** CIBC Trust Corporation is the trustee of a self-directed RRSP that has been the subject of proceedings in the Tax Court of Canada. The proceedings arise from appeals of tax assessments made by the Minister of National Revenue against the RRSP for the 2004 to 2009 taxation years under Parts I and XI.1 of the Income Tax Act (Canada). At the time they were made in March 2013, the Part I assessment amounted to approximately $139 million and the Part XI.1 reassessment totalled approximately $144 million, in each case including all taxes, penalties and interest. In April 2021, the Tax Court of Canada released a decision allowing the appeal in part of the assessment under Part I and dismissing the appeal of the reassessment under Part XI.1. The RRSP by its trustee CIBC Trust has appealed this decision to the Federal Court of Appeal. To the extent there is a shortfall in the RRSP's ability to satisfy any of the Part XI.1 reassessment that may be upheld by the courts, CIBC Trust may be liable to pay a portion of that reassessment.

#### Legal provisions

The following table presents changes in our legal provisions:

| $ millions, for the year ended October 31 | 2021 | 2020 |
|---|---|---|
| Balance at beginning of year | \$ 151 | \$ 67 |
| Additional new provisions recognized | 169 | 92 |
| Less: | | |
| Amounts incurred and charged against existing provisions | (13) | (6) |
| Unused amounts reversed and other adjustments | - | (5) |
| **Balance at end of year** | **\$ 301** | **\$ 151** |

#### Restructuring

During the first quarter of 2020, we recognized a restructuring charge of $339 million in Corporate and Other associated with ongoing efforts to transform our cost structure and simplify our bank. The charge consisted primarily of employee severance and related costs and was recorded in Non-interest expenses - Employee compensation and benefits.

The following table presents changes in the restructuring provision:

| $ millions, for the year ended October 31 | 2021 | 2020 |
|---|---|---|
| Balance at beginning of year | \$ 222 | \$ 26 |
| Additional new provisions recognized | 14 | 370 |
| Less: | | |
| Amounts incurred and charged against existing provisions | (112) | (25) |
| Unused amounts reversed | (152) | (22) |
| **Balance at end of year** | **\$ 99** | **\$ 222** |

The amount of $99 million recognized represents our best estimate as at October 31, 2021 of the amount required to settle the obligation, including obligations related to ongoing payments as a result of the restructuring.

### Note 24 Concentration of credit risk

Concentration of credit exposure may arise with a group of counterparties that have similar economic characteristics or are located in the same geographic region. The ability of such counterparties to meet contractual obligations would be similarly affected by changing economic, political or other conditions.

The amounts of credit exposure associated with our on- and off-balance sheet financial instruments are summarized in the following table:

| Credit exposure by country of ultimate risk $ millions, as at October 31 | Canada | U.S. countries | Other | Total | Canada | U.S. countries | Other | Total |
|---|---|---|---|---|---|---|---|---|
| **On-balance sheet** | | | | | | | | |
| Major assets (1)(2)(3) | \$ 537,932 | \$ 181,813 | \$ 77,384 | \$ 797,129 | \$ 512,542 | \$ 151,337 | \$ 70,945 | \$ 734,824 |
| **Off-balance sheet** | | | | | | | | |
| Credit-related arrangements | | | | | | | | |
| Financial institutions | 59,636 | 18,315 | 16,458 | 94,409 | 48,236 | 13,482 | 12,737 | 74,455 |
| Governments | 11,229 | 10 | 8 | 11,247 | 9,860 | 7 | 10 | 9,877 |
| Retail | 154,341 | 700 | 383 | 155,424 | 142,351 | 554 | 434 | 143,339 |
| Corporate | 77,939 | 33,233 | 8,790 | 119,962 | 70,130 | 30,839 | 8,452 | 109,421 |
| | **\$ 303,145** | **\$ 52,258** | **\$ 25,639** | **\$ 381,042** | **\$ 270,577** | **\$ 44,885** | **\$ 21,630** | **\$ 337,092** |

(1) Major assets consist of cash and deposits with banks, loans and acceptances net of allowance for credit losses, securities, securities borrowed or purchased under resale agreements, and derivative instruments.
(2) Includes Canadian currency of $522.8 billion (2020: $497.3 billion) and foreign currencies of $274.3 billion (2020: $237.5 billion).
(3) No industry or foreign jurisdiction accounted for more than 10% of loans and acceptances net of allowance for credit losses, with the exception of the U.S., which accounted for 13% as at October 31, 2021 (2020: 13%).

See Note 13 for derivative instruments by country and counterparty type of ultimate risk. In addition, see Note 22 for details on the client securities lending of the joint ventures which CIBC has with The Bank of New York Mellon.

Also see shaded sections in "MD&A – Management of risk" for a detailed discussion on our credit risk.

### Note 25 Related-party transactions

In the ordinary course of business, we provide banking services and enter into transactions with related parties on terms similar to those offered to unrelated parties. Related parties include key management personnel (1), their close family members, and entities that they or their close family members control or jointly control. Related parties also include associates and joint ventures accounted for under the equity method, and post-employment benefit plans for CIBC employees. Loans to these related parties are made in the ordinary course of business and on substantially the same terms as for comparable transactions with unrelated parties. As CIBC's subsidiaries are consolidated, transactions with these entities have been eliminated and are not reported as related-party transactions. We offer a subsidy on annual fees and preferential interest rates on credit card balances to senior officers, which is the same offer extended to all employees of CIBC.

#### Key management personnel and their affiliates

As at October 31, 2021, loans to key management personnel (1) and their close family members and to entities that they or their close family members control or jointly control totalled $17 million (2020: $139 million), letters of credit and guarantees were nil (2020: $2 million), and undrawn credit commitments totalled $11 million (2020: $65 million).

These outstanding balances are generally unsecured and we have no provision for credit losses on impaired loans relating to these amounts for the years ended October 31, 2021 and 2020.

(1) Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of CIBC directly or indirectly and comprise the members of the Board (referred to as directors), Executive Committee and certain named officers per the Bank Act (Canada) (collectively referred to as senior officers). Board members who are also Executive Committee members are included as senior officers.

#### Compensation of key management personnel

| $ millions, for the year ended October 31 | 2021 | 2020 |
|---|---|---|
| | Directors | Senior officers | Directors | Senior officers |
| Short-term benefits (1) | \$ 3 | \$ 18 | \$ 3 | \$ 18 |
| Post-employment benefits | 1 | 3 | 1 | 3 |
| Share-based benefits (2) | - | 30 | - | 30 |
| Termination benefits | - | - | - | 4 |
| **Total compensation** | **\$ 4** | **\$ 51** | **\$ 4** | **\$ 55** |

(1) Comprises salaries, statutory and non-statutory benefits related to senior officers and fees related to directors recognized during the year. Also includes annual incentive plan payments related to senior officers on a cash basis.
(2) Comprises grant-date fair values of awards granted in the year.

Refer to the following Notes for additional details on related-party transactions:

* **Share-based payment plans** See Note 18 for details of these plans offered to directors and senior officers.
* **Post-employment benefit plans** See Note 19 for related-party transactions between CIBC and the post-employment benefit plans.
* **Equity-accounted associates and joint ventures** See Note 26 for details of our investments in equity-accounted associates and joint ventures.

### Note 26 Investments in equity-accounted associates and joint ventures

#### Joint ventures

CIBC is a 50/50 joint venture partner with The Bank of New York Mellon in two joint ventures: CIBC Mellon Trust Company and CIBC Mellon Global Securities Services Company (collectively referred to as CIBC Mellon), which provide trust and asset servicing, both in Canada. As at October 31, 2021, the carrying value of our investments in the joint ventures was $592 million (2020: $587 million), which was included in Corporate and Other.

As at October 31, 2021, loans to the joint ventures totalled $5 million (2020: nil) and undrawn credit commitments totalled $122 million (2020: $164 million).

CIBC, The Bank of New York Mellon, and CIBC Mellon have, jointly and severally, provided indemnities to customers of the joint ventures in respect of securities lending transactions. See Note 22 for additional details.

There was no unrecognized share of losses of any joint ventures, either for the year or cumulatively. In 2021 and 2020, none of our joint ventures experienced any significant restrictions to transfer funds in the form of cash dividends or distributions, or repayment of loans or advances.

The following table provides the summarized aggregate financial information related to our proportionate interest in the equity-accounted joint ventures:

| $ millions, for the year ended October 31 | 2021 | 2020 | 2019 |
|---|---|---|---|
| Net income | \$ 51 | \$ 67 | \$ 88 |
| OCI | (44) | 43 | 45 |
| **Total comprehensive income** | **\$ 7** | **\$ 110** | **\$ 133** |

#### Associates

As at October 31, 2021, the total carrying value of our investments in associates was $66 million (2020: $71 million). These investments comprise: listed associates with a carrying value of nil (2020: $10 million) and a fair value of nil (2020: $10 million); and unlisted associates with a carrying value of $66 million (2020: $61 million) and a fair value of $89 million (2020: $83 million). Of the total carrying value of our investments in associates, $9 million (2020: $10 million) was included in Canadian Personal and Business Banking, $37 million (2020: $37 million) in Capital Markets, and $20 million (2020: $24 million) in Corporate and Other.

As at October 31, 2021, loans to associates totalled $34 million (2020: nil) and undrawn credit commitments totalled $1 million (2020: $79 million). We also had commitments to invest up to nil (2020: nil) in our associates.

There was no unrecognized share of losses of any associate, either for the year or cumulatively. In 2021 and 2020, none of our associates experienced any significant restrictions to transfer funds in the form of cash dividends or distributions, or repayment of loans or advances.

The following table provides the summarized aggregate financial information related to our proportionate interest in equity-accounted associates:

| $ millions, for the year ended October 31 | 2021 | 2020 | 2019 |
|---|---|---|---|
| Net income | \$ 4 | \$ 12 | \$ 4 |
| OCI | 1 | 1 | (1) |
| **Total comprehensive income** | **\$ 5** | **\$ 13** | **\$ 3** |

### Note 27 Significant subsidiaries

The following is a list of significant subsidiaries in which CIBC, either directly or indirectly, owns 100% of the voting shares, except where noted.

| Subsidiary name (1) | Address of head or principal office | Book value of shares owned by CIBC (2) |
|---|---|---|
| **Canada and U.S.** | | |
| CIBC Asset Management Inc. | Toronto, Ontario, Canada | \$ 444 |
| CIBC BA Limited | Toronto, Ontario, Canada | – (3) |
| CIBC Bancorp USA Inc. | Chicago, Illinois, U.S. | 9,331 |
| Canadian Imperial Holdings Inc. | New York, New York, U.S. | |
| CIBC Inc. | New York, New York, U.S. | |
| CIBC World Markets Corp. | New York, New York, U.S. | |
| CIBC Bank USA | Chicago, Illinois, U.S. | |
| CIBC Private Wealth Group, LLC | Atlanta, Georgia, U.S. | |
| CIBC Delaware Trust Company | Wilmington, Delaware, U.S. | |
| CIBC National Trust Company | Atlanta, Georgia, U.S. | |
| CIBC Private Wealth Advisors, Inc. | Chicago, Illinois, U.S. | |
| CIBC Investor Services Inc. | Toronto, Ontario, Canada | 25 |
| CIBC Life Insurance Company Limited | Toronto, Ontario, Canada | 23 |
| CIBC Mortgages Inc. | Toronto, Ontario, Canada | 230 |
| CIBC Securities Inc. | Toronto, Ontario, Canada | 2 |
| CIBC Trust Corporation | Toronto, Ontario, Canada | 591 |
| CIBC World Markets Inc. | Toronto, Ontario, Canada | 306 |
| CIBC Wood Gundy Financial Services Inc. | Toronto, Ontario, Canada | |
| CIBC Wood Gundy Financial Services (Quebec) Inc. | Montreal, Quebec, Canada | 100 |
| INTRIA Items Inc. | Mississauga, Ontario, Canada | |
| **International** | | |
| CIBC Australia Ltd | Sydney, New South Wales, Australia | 19 |
| CIBC Capital Markets (Europe) S.A. | Luxembourg | 550 |
| CIBC Cayman Holdings Limited | George Town, Grand Cayman, Cayman Islands | 1,742 |
| CIBC Cayman Bank Limited | George Town, Grand Cayman, Cayman Islands | |
| CIBC Cayman Capital Limited | George Town, Grand Cayman, Cayman Islands | 2,820 |
| CIBC Cayman Reinsurance Limited | George Town, Grand Cayman, Cayman Islands | |
| CIBC Investments (Cayman) Limited | George Town, Grand Cayman, Cayman Islands | |
| FirstCaribbean International Bank Limited (91.7%) | Warrens, St. Michael, Barbados | |
| FirstCaribbean International Bank and Trust Company (Cayman) Limited (91.7%) | George Town, Grand Cayman, Cayman Islands | |
| CIBC Fund Administration Services (Asia) Limited (91.7%) | Hong Kong, China | |
| FirstCaribbean International Bank (Bahamas) Limited (87.3%) | Nassau, The Bahamas | |
| Sentry Insurance Brokers Ltd. (87.3%) | Nassau, The Bahamas | |
| FirstCaribbean International Bank (Barbados) Limited (91.7%) | Warrens, St. Michael, Barbados | |
| FirstCaribbean International Finance Corporation (Leeward & Windward) Limited (91.7%) | Castries, St. Lucia | |
| FirstCaribbean International Securities Limited (91.7%) | Kingston, Jamaica | |
| FirstCaribbean International Bank (Cayman) Limited (91.7%) | George Town, Grand Cayman, Cayman Islands | |
| FirstCaribbean International Finance Corporation (Netherlands Antilles) N.V. (91.7%) | Curacao, Netherlands Antilles | |
| FirstCaribbean International Bank (Curacao) N.V. (91.7%) | Curacao, Netherlands Antilles | |
| FirstCaribbean International Bank (Jamaica) Limited (91.7%) | Kingston, Jamaica | |
| FirstCaribbean International Bank (Trinidad and Tobago) Limited (91.7%) | Maraval, Port of Spain, Trinidad & Tobago | |
| FirstCaribbean International Trust Company (Bahamas) Limited (91.7%) | Nassau, The Bahamas | |
| FirstCaribbean International Wealth Management Bank (Barbados) Limited (91.7%) | Warrens, St. Michael, Barbados | 48 |
| CIBC World Markets (Japan) Inc. | Tokyo, Japan | |

(1) Each subsidiary is incorporated or organized under the laws of the state or country in which the principal office is situated, except for Canadian Imperial Holdings Inc., CIBC Inc., CIBC Capital Corporation, CIBC World Markets Corp., CIBC Private Wealth Group, LLC, CIBC Private Wealth Advisors, Inc., and CIBC Bancorp USA Inc., which were incorporated or organized under the laws of the State of Delaware, U.S.; CIBC National Trust Company, which was organized under the laws of the U.S.; and CIBC World Markets (Japan) Inc., which was incorporated in Barbados.
(2) The book value of shares of subsidiaries is shown at cost and may include non-voting common and preferred shares. These amounts are eliminated upon consolidation.
(3) The book value of shares owned by CIBC is less than $1 million.

In addition to the above, we consolidate certain SEs where we have control over the SE. See Note 7 for additional details.

### Note 28 Financial instruments – disclosures

Certain disclosures required by IFRS 7 are provided in the shaded sections of the "MD&A – Management of risk", as permitted by IFRS. The following table provides a cross referencing of those disclosures in the MD&A.

| Description | Section |
|---|---|
| For each type of risk arising from financial instruments, an entity shall disclose: the exposure to risks and how they arise; objectives, policies and processes used for managing the risks; methods used to measure the risk; and description of collateral. | Risk overview Credit risk Market risk Liquidity risk |
| Credit risk: gross exposure to credit risk, credit quality and concentration of exposures. | Credit risk |
| Market risk: trading portfolios - Value-at-Risk (VaR); stressed VaR, incremental risk charge, non-trading portfolios - interest rate risk, foreign exchange risk and equity risk. | Market risk |
| Liquidity risk: liquid assets, maturity of financial assets and liabilities, and credit commitments. | Liquidity risk |

We have provided quantitative disclosures related to credit risk consistent with Basel guidelines in the "Credit risk" section of the MD&A. The table below sets out the categories of the on-balance sheet exposures that are subject to the credit risk framework as set out in the Capital Adequacy Requirements (CAR) Guideline issued by OSFI under the different Basel approaches based on the carrying value of those exposures in our consolidated financial statements. The credit risk framework includes CCR exposures arising from OTC derivatives, repo-style transactions and trades cleared through CCPs, as well as securitization exposures. Items not subject to the credit risk framework include exposures that are subject to the market risk framework, amounts that are not subject to capital requirements or are subject to deduction from capital, and amounts relating to CIBC's insurance subsidiaries, which are excluded from the scope of regulatory consolidation.

| $ millions, as at October 31 | AIRB approach | Standardized approach | Other credit risk (1) | Total subject to credit risk | Not subject to credit risk | Total consolidated balance sheet |
|---|---|---|---|---|---|---|
| **2021** | | | | | | |
| Cash and deposits with banks | \$ 40,418 | \$ 14,764 | \$ 1,793 | \$ 56,975 | \$ 22 | \$ 56,997 |
| Securities | 93,476 | 11,686 | | 105,162 | 56,239 | 161,401 |
| Cash collateral on securities borrowed | 12,362 | 6 | | 12,368 | - | 12,368 |
| Securities purchased under resale agreements | 67,572 | | | 67,572 | - | 67,572 |
| Loans | 408,087 | 43,463 | 1,494 | 453,044 | 1,726 | 454,770 |
| Allowance for credit losses | (2,190) | (659) | | (2,849) | - | (2,849) |
| Derivative instruments | 35,865 | 47 | | 35,912 | - | 35,912 |
| Customers' liability under acceptances | 10,671 | 287 | | 10,958 | - | 10,958 |
| Other assets | 21,889 | 292 | 7,988 | 30,169 | 10,385 | 40,554 |
| **Total credit exposures** | **\$ 688,150** | **\$ 69,886** | **\$ 11,275** | **\$ 769,311** | **\$ 68,372** | **\$ 837,683** |
| **2020** | | | | | | |
| Total credit exposures | \$ 634,193 | \$ 65,911 | \$ 10,699 | \$ 710,803 | \$ 58,748 | \$ 769,551 |

(1) Includes credit risk exposures arising from other assets that are subject to the credit risk framework but are not included in the standardized or AIRB frameworks, including other balance sheet assets which are risk-weighted at 100%, significant investments in the capital of non-financial institutions, and amounts below the thresholds for capital deduction that are risk-weighted at 250%.

### Note 29 Offsetting financial assets and liabilities

The following table identifies the amounts that have been offset on the consolidated balance sheet in accordance with the requirements of IAS 32 "Financial Instruments: Presentation", and also those amounts that are subject to enforceable netting agreements but do not qualify for offsetting on the consolidated balance sheet either because we do not have a currently enforceable legal right to set-off the recognized amounts, or because we do not intend to settle on a net basis or to realize the asset and settle the liability simultaneously.

| $ millions, as at October 31 | Gross amounts of recognized financial assets | Gross amounts offset on the consolidated balance sheet (1) | Amounts subject to enforceable netting agreements | | | Net amounts presented on the consolidated balance sheet |
|---|---|---|---|---|---|---|
| | | Financial instruments (2) | Collateral received (3) | Net amounts | | |
| **2021** | **Financial assets** | | | | | | |
| Derivatives | \$ 53,285 | \$ (22,668) | \$ 30,617 | \$ (16,585) | \$ (6,375) | \$ 7,657 | \$ 5,295 | \$ 35,912 |
| Cash collateral on securities borrowed | 12,368 | - | 12,368 | (12,121) | 247 | - | 12,368 |
| Securities purchased under resale agreements | 71,777 | (4,205) | 67,572 | (66,423) | 1,149 | - | 67,572 |
| | \$ 137,430 | \$ (26,873) | \$ 110,557 | \$ (16,585) | \$ (84,919) | \$ 9,053 | \$ 5,295 | \$ 115,852 |
| **Financial liabilities** | | | | | | | | |
| Derivatives | \$ 49,607 | \$ (22,668) | \$ 26,939 | \$ (16,585) | \$ (6,617) | \$ 3,737 | \$ 5,162 | \$ 32,101 |
| Cash collateral on securities lent | 2,463 | - | 2,463 | (2,331) | 132 | - | 2,463 |
| Obligations related to securities sold under repurchase agreements | 76,085 | (4,205) | 71,880 | (70,567) | 1,313 | - | 71,880 |
| | **\$ 128,155** | **\$ (26,873)** | **\$ 101,282** | **\$ (16,585)** | **\$ (79,515)** | **\$ 5,182** | **\$ 5,162** | **\$ 106,444** |
| **2020** | **Financial assets** | | | | | | | |
| Derivatives | \$ 59,024 | \$ (29,989) | \$ 29,035 | \$ (19,347) | \$ (5,170) | \$ 4,518 | \$ 3,695 | \$ 32,730 |
| Cash collateral on securities borrowed | 8,547 | - | 8,547 | (8,267) | 280 | - | 8,547 |
| Securities purchased under resale agreements | 68,335 | (2,740) | 65,595 | (65,178) | 417 | - | 65,595 |
| | **\$ 135,906** | **\$ (32,729)** | **\$ 103,177** | **\$ (19,347)** | **\$ (78,615)** | **\$ 5,215** | **\$ 3,695** | **\$ 106,872** |
| **Financial liabilities** | | | | | | | | |
| Derivatives | \$ 56,461 | \$ (29,989) | \$ 26,472 | \$ (19,347) | \$ (5,883) | \$ 1,242 | \$ 4,036 | \$ 30,508 |
| Cash collateral on securities lent | 1,824 | - | 1,824 | (1,719) | 105 | - | 1,824 |
| Obligations related to securities sold under repurchase agreements | 74,393 | (2,740) | 71,653 | (70,567) | 1,313 | - | 71,653 |
| | **\$ 132,678** | **\$ (32,729)** | **\$ 99,949** | **\$ (19,347)** | **\$ (78,970)** | **\$ 1,632** | **\$ 4,036** | **\$ 103,985** |

(1) Comprises amounts related to financial instruments which qualify for offsetting. Derivatives cleared through the CME are considered to be settled-to-market and not collateralized-to-market. Derivatives which are settled-to-market are settled on a daily basis, resulting in derecognition, rather than offsetting, of the related amounts. As a result, settled-to-market amounts are not considered to be subject to enforceable netting arrangements. In the absence of this, an amount of $309 million as at October 31, 2021 (2020: $964 million) relating to derivatives cleared through CME would otherwise have been considered to be offset on the consolidated balance sheet.
(2) Comprises amounts subject to set-off under enforceable netting agreements, such as ISDA agreements, derivative exchange or clearing counterparty agreements, global master repurchase agreements, and global master securities lending agreements. Under such arrangements, all outstanding transactions governed by the relevant agreement can be offset if an event of default or other predetermined event occurs.
(3) Collateral received and pledged amounts are reflected at fair value, but have been limited to the net balance sheet exposure so as not to include any over-collateralization.
(4) Includes exchange-traded derivatives and derivatives which are settled-to-market.

The offsetting and collateral arrangements discussed above and other credit risk mitigation strategies used by CIBC are further explained in the "Credit risk" section of the MD&A. Certain amounts of securities received as collateral are restricted from being sold or re-pledged.

### Note 30 Interest income and expense

The table below provides the consolidated interest income and expense by accounting categories.

| $ millions, for the year ended October 31 | Interest income | Interest expense |
|---|---|---|
| **2021** | | |
| Measured at amortized cost (1)(2) | \$ 12,816 | \$ 2,830 |
| Debt securities measured at FVOCI (1) | 1,576 | 452 |
| Other (3) | 349 | n/a |
| **Total** | **\$ 14,741** | **\$ 3,282** |
| **2020** | | |
| Measured at amortized cost (1)(2) | \$ 15,055 | \$ 6,062 |
| Debt securities measured at FVOCI (1) | 1,782 | 416 |
| Other (3) | 685 | n/a |
| **Total** | **\$ 17,522** | **\$ 6,478** |
| **2019** | | |
| Measured at amortized cost (1) | \$ 17,871 | \$ 9,824 |
| Debt securities measured at FVOCI (1) | 1,866 | 322 |
| Other (3) | 960 | n/a |
| **Total** | **\$ 20,697** | **\$ 10,146** |

(1) Interest income for financial instruments that are measured at amortized cost and debt securities that are measured at FVOCI is calculated using the effective interest rate method.
(2) Effective November 1, 2019, includes interest income on sublease-related assets and interest expense on lease liabilities under IFRS 16.
(3) Includes interest income and expense and dividend income for financial instruments that are mandatorily measured and designated at FVTPL and equity securities designated at FVOCI.
n/a Not applicable.

### Note 31 Segmented and geographic information

CIBC has four SBUs – Canadian Personal and Business Banking, Canadian Commercial Banking and Wealth Management, U.S. Commercial Banking and Wealth Management, and Capital Markets. These SBUs are supported by Corporate and Other.

* **Canadian Personal and Business Banking** provides personal and business clients across Canada with financial advice, services and solutions through banking centres, digital, and mobile channels to help make their ambitions a reality.
* **Canadian Commercial Banking and Wealth Management** provides high-touch, relationship-oriented banking and wealth management services to middle-market companies, entrepreneurs, high-net-worth individuals and families across Canada, as well as asset management services to institutional investors.
* **U.S. Commercial Banking and Wealth Management** provides commercial banking and private wealth services across the U.S., as well as personal and small business banking services in four U.S. Midwestern markets and focuses on middle-market and mid-corporate companies and high-net-worth individuals and families.
* **Capital Markets** provides integrated global markets products and services, investment banking advisory and execution, corporate banking solutions and top-ranked research to our clients around the world. It includes Direct Financial Services which focuses on expanding CIBC's digitally-enabled capabilities to provide a cohesive set of direct banking, direct investing and innovative multi-currency payment solutions for CIBC's clients.
* **Corporate and Other** includes the following functional groups - Technology, Infrastructure and Innovation, Risk Management, People, Culture and Brand, Finance and Enterprise Strategy, as well as other support groups. The expenses of these functional and support groups are generally allocated to the business lines within the SBUs. The majority of the functional and support costs of CIBC Bank USA are recognized directly in the U.S. Commercial Banking and Wealth Management SBU. Corporate and Other also includes the results of CIBC FirstCaribbean and other strategic investments, as well as other income statement and balance sheet items not directly attributable to the business lines.

#### Business unit allocations

Revenue, expenses, and other balance sheet resources related to certain activities are generally allocated to the lines of business within the SBUs. Treasury activities impact the financial results of the SBUs. Each line of business within our SBUs is charged or credited with a market-based cost of funds on assets and liabilities, respectively, which impacts the revenue performance of the SBUs. This market-based cost of funds takes into account the cost of maintaining sufficient regulatory capital to support business requirements, including the cost of preferred shares. Once the interest and liquidity risks inherent in our client-driven assets and liabilities are transfer priced into Treasury, they are managed within CIBC's risk framework and limits. Consistent with the changes discussed in the "Changes made to our business segments" section, the residual financial results associated with Treasury activities are reported in Corporate and Other. Capital is attributed to the SBUs based on the estimated amount of regulatory capital required to support their businesses, which is intended to consistently measure and align the costs with the underlying benefits and risks associated with SBU activities. Earnings on unattributed capital remain in Corporate and Other.

We review our transfer pricing methodologies on an ongoing basis to ensure they reflect changing market environments and industry practices. We use a Product Owner/Customer Segment/Distributor Channel allocation management model to measure and report the results of operations of various lines of business within our SBUs. The model uses certain estimates and methodologies to process internal transfers between the impacted lines of business for sales, renewals and trailer commissions as well as certain attributable costs. Periodically, the sales, renewals and trailer commission rates paid to customer segments for certain products/services are revised and applied prospectively.

The non-interest expenses of the functional and support groups are generally allocated to the business lines within the SBUs based on appropriate criteria and methodologies. The basis of allocation is reviewed periodically to reflect changes in support to business lines. Other costs not directly attributable to business lines remain in Corporate and Other.

We recognize provision for credit losses on both impaired (stage 3) and performing (stages 1 and 2) loans in the respective SBUs.

#### Changes made to our business segments

##### 2021

The following changes were made in the first quarter of 2021:
* Simplii Financial and CIBC Investor's Edge, previously reported in Canadian Personal and Business Banking, are now part of the newly-created Direct Financial Services line of business in Capital Markets, along with certain other direct payment services that were previously in Capital Markets. This change was made to align with the mandates of the relevant SBUs.
* The financial results associated with U.S. treasury activities in U.S. Commercial Banking and Wealth Management are now included within Treasury in Corporate and Other. In addition, the transfer pricing methodology between U.S. Commercial Banking and Wealth Management and Treasury in Corporate and Other has been enhanced. Both changes align the treatment of U.S. Commercial Banking and Wealth Management with our other SBUs, and allow for better management of interest rate and liquidity risks.

These changes impacted the results of our SBUs. Prior period amounts were revised accordingly. There was no impact on