CM - Earnings call transcript Q2 2022 | Canadian Imperial Bank of Commerce

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Operator

Good morning. Welcome to the CIBC Quarterly Financial Results Call. Please be advised that this call is being recorded. I would like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations. Please go ahead, Geoff.

Geoff Weiss

morning. good and you, Thank

Chief We group will Victor and Hratch opening from a Beber, presentation our the Also call today this our President morning's are our Banking Shawn Capital Dottori Attanasio, Dodig, Banking Canadian and heads, including Banking by of Management. Financial with Officer. Commercial and Canadian . Laura US Chief Wealth Hountalas, on and Wealth our our and available Markets; questions remarks Business number Officer; and begin Risk all Mike Capatides, CEO; Management, Jon Panossian, from followed Harry remarks. to Culham, the following They're Personal Commercial take prepared

one. with During we stop that a X:XX, to at hard the you Q&A, ask questions limit your

X investor Victor. Actual uncertainties. will that, may on involve now our meeting which statements, turn noted With our to forward-looking may and presentation, have risks As assumptions the I differ materially. contain Slide inherent comments results and of over

Victor Dodig

good like of our Thank on followed summary a Geoff, a to by the quarter macroeconomic everyone. results. comments with call and second few you, the environment, open morning, I'd

So we're there's a in fluid no all environment. very doubt

foremost, the those affected with First war thoughts who been in have our and are Ukraine. by

to slowdown. disruptions, an conflict inflationary exacerbated to the rates impact, the human its pressures, Beyond to concerns COVID-related and supply which leading economic inflationary Central around cool is by the interest responding raising chain banks, contributed is globe. around pressures globe, are

sustainable Now support and CIBC. strong balance risk sheet consistent will for prudent with during our our performance times model, this, business our like our unrelenting and diversified together for our clients, drive

starting we driven results focus quarter, backdrop, broad-based financial deposit Revenue for the our and for on of income normalization in were year modestly underpinned up as to enduring last billion provisions trading growth, we in earnings by resilience from down reported Against higher performance. and this credit year, prior per $X.X strategic over see this X% can Adjusted and $X.XX was see fee profitable were a client-based by growth. investing our activity. macroeconomic this solid strong or losses. share loan You

earlier and delivered of also adjusted well Having half performance We an CETX increase share, while our on solid requirement. split target above $X.XXX previously to stock between of per ratio today, dividend ratio shareholders and XX.X%, the effect X-for-X reflects share payout the target common financial XX.X% of the a month. to our Note in XX%. the announced $X.XX minimum we behalf this dividend ROE XX% announced that of of year, also our took the also first a reported that XX.X% maintaining

turning business results. our to So

businesses during Canadian sheet. quarter continued both sides with the Our the strength of consumer balance on growth demonstrated

our ago, in from as services, for XX% spending, hotel, as Mastercard notably took Costco and on entertainment hold. purchase were such contributions most a transportation volumes economic up acquisition, Excluding year expenses from card restaurant discretionary as well reopening

million Costco growth second are to we adding new and the We're of pleased X positive, clients Canada, more welcome of our ahead portfolio in new the to portfolio expectations. acquisition purchase completed volumes CIBC. During of purchase very volumes. credit the has one-third our also card account performance all to Early acquisition, balance been than tracking total quarter,

relationships quarters deepen newly our progress ahead. you to and reporting forward place in look the on clients to initiatives have We with to our on-boarded in

financial this, start get and fee and among the said, for for existing existing This by and free program quarter our a of we youth momentum making bank. to banking relationships journey. trading you're it offer our further acquisition. to to We're believe clients, free CIBC their for future. on also for a Smart CIBC Canadian trade cohort. offerings Better you investments self-directed under help the first and no we simplifies end, students, fee if banking will by to client at continue solution bank a age the – in up Start, providing with XX our banks We no to our build no Post launched XX you're this head Canadians solution new major market-leading

working existing student Over XX Commercial Management, markets to North last XX% with and support growth this last growth in quarter. single in to Management, Canada months, to border, of and both In seen growth volatile requirements a a US, from Loan the Wealth their client in we've the slight new decline and offering sides compares support client segment. on in and double-digit In both digits by concerns by capital Wealth asset increased the increased will the new driven fueled demand our American population dampened further our relationships. base Banking geopolitical this regions

through of revenue. in deliver businesses on continue wealth volatile Markets, strong generated across our regions. Now in Capital spite net this flows – clients volatility our focus we trading market markets to solid In supporting both

pay services growth continued financial contributed benefit direct in from businesses banking our with student business well, both currency volume student international our to solid results. Overall, business offers. our our and and of Financial international Simply As associated to conversion each

our matters. that of attract By a and an our a communities is retain culture. our we of with in employers culture proud we're to year. year. clients can bank's And At ideas our insights employer one clients team number who one deliver Providing for ambitions second Equileap, Canada ranked and the Canada's as Mediacorp Now, a Canada cornerstone the to of consecutive and inclusive for recognized better named having best be who reflects by by purpose XXth reality. quarter environment this the equality CIBC, differing CIBC gender CIBC making talent diversity consecutive on

we're for looking our fluid, unwavering, we ahead, increasingly what positioned shareholders. can continue deliver thing on well to an that's focus our to environment In Now remains one control.

agility Today, and a increasing an with digitized an at the we resilience is environment of on and a to did on continue economic will infrastructure. demonstrate streamlined emphasis our stewardship. adapt and as we COVID, changing bank to As outset we emphasis the with CIBC

Our the over long the collaborative first the to client enable growth culture us short, over medium drive term. strategy and will and profitable over

more hear going now You're opportunity team you, that, our review And capabilities quarter in leadership and our our have call for vision Over and results our more detail. Hratch. with upcoming the future Hratch at directly to Investor me to turn about strategy, to Day. connect let the with to to our our over the second more

Hratch Panossian

and Thank good you, Victor, everyone. morning,

will trended and the item CIBC the strong, growth and the and Costco revenues presentation, credit remained XX% X% of in into margin, provisions of year, interest $X.XX Shawn year was an comparable growth, earnings pretax were income. targeted and cover results, Diving eight. of in Net our card billion and higher to by fee credit of X% this to across from to the strategy. quarter, presentation billion and while were slide as business. appendix pessimistic starting detail above pre-provision detailed focused net growth my to of provisions economic profitability by per of was fueled XX% $X.XX. up prior our adjusted target. sheet compensation of our ROE against investments, outlook against will presentation. performing share note from items Slide highlights balance EPS due deployment of up the income was broad-based earnings deliver losses Diluted resources and Pre-provision for key up momentum $X.X $X.X initial exclude treated team Expenses remained volume sequentially of balance client loans headwinds with prior which adjusted prior X%, Our a trading this due to $X.X disciplined The refer loss were continued solid supported nine stable items the the our portfolio IFRS performance-based earnings X revenue note, the year, continued and robust of drivers more pre-provision or Pretax income. the later excluding largely credit expected against inflationary -- further billion credit note. in investments further.

to from the provides US to balance was managed go-forward both primarily rates. to in due from our NII nonrecurring segment remain NII half interest rates Slide last sensitivity trading, growth We in continued the Consistent the prior items, income. of prepayment with anticipate offset growth changes last the up partly year, year, funds pricing. back portfolio by benefiting to the due on rising and positioned strong in sheet. sides robust of of rates, embedded Excluding sequentially. forward unsecured point was of improving mix and rising volume growth higher-margin competitive Costco basis NIM interest PNC NIM Commercial an benefiting X X Canadian on the the continue quarter, impact and Personal including in points, up bank credit in Banking was lending. our up outlook over the this, and basis NIM interest overview growth and underlying from was basis card of points rate Total And in NIM the XX% is back X interest guidance, lower our to XX down curve.

significantly rates. be continue to to We rising from positioned benefit

year. Turning in deal a Conversely, X% up to X%, equities. rates, and industry fees. revenues, from billion lower fees issuance credit year, the from deposit were trading income interest prior in XX. slide Market-related growth $X.X and the by Noninterest foreign was from were of held up strong exchange fees more were impacted advisory as modest volumes. payment by prior fees X% well and up as underwriting and benefiting Transaction-related particularly

performance-based XX% the over compensation, year, in well or by the US inflation strategic notably XX. Costco as initiatives, platform, excluding slide up expenses. Turning our the driven program baseline impact to of credit on X% higher operating Expenses most prior and investments card were as

neutral inflationary continue for XXXX. the While than we anticipated, to positive been target elevated pressures have operating more originally fiscal leverage

the approximately market-related of growth Costco as we've the Over largely and the quarter and We resources last on slide prior the points of and both with sheet our position portfolio volatility the organic impact value fair of by a quarter ratio closing quarter, market balance excess CETX card of CI in franchise, liquidity on deployed driven remains capital value quarters, ended but across the credit -- XX. RWAs. XX.X%, strong, the securities XX our basis from down the successfully several highlighted towards

prior portfolio Costco reflecting share to and offset pretax Revenues from same last higher by billion to consumer pressure, continue volume our quarter were $XXX mortgages. from were million due year of to capital particularly from million, growth, of margin X% forward, we the unit expect including driven as in growth strategic ago, capital shareholders. highlight more of to slide for stable organic we credit Banking $XXX by higher XX, our provisions internal Canadian X% quarter income Net and ratios business down capital going the results. return year Starting XX% a losses. partially franchise. grow card and Business as income, business Pre-provision generation the year, Personal earnings for broad-based up up fee We and gains funds was be the on $X.X in

same have We of were this added which up across contributions incremental franchise. X% sequentially billion of our some broadly XX% remarks by quarter diversified strategic higher and was as highlighting revenue last page, year, investments nature the supported largely on the at our remaining Expenses growth, employee-related a disclosure which my is by from Canadian $X.X The the time. and in expenses. onetime included driven growth highlighted recovery

over fee-based strong from deposit double-digit primarily investments large sales and moderate by part Wealth due Moving was the from on revenue XX% up and robust ago. period. in US in going and growth increased Net Commercial $XXX forward. Management higher up markets. net by driven was year, Banking which Commercial the up income and earnings initiatives. million, supported X% XX% pretax volume by Management assets were up revenue credit benefited to in over XX. provisions. pretax Canadian income ago, same were to expenses Net is down a million Slide Wealth market which earnings and higher up growth, year and Commercial performance expected million, constructive higher $XXX driven year from XX% Pre-provision appreciation XX% Pre-provision a in million benefiting revenue to strategic and $XXX Wealth from prior X%, of last the loan from were was year of in was $XXX

to scale to to the the deposits supported and income. up prior and loans were X% XX% by revenue from growth prior base US with client investments support investing continue keep our our simultaneously our scale and to client-facing across pace our Revenues business plans business over management ongoing in infrastructure US Expenses strong largely in our year, up on risk operational the execute as well organically in We order due to by of and average and our in were sequentially operations. as long-term growth, the fee ambitions. drive capabilities infrastructure and year, XX% our growth

We from phase rapid Global well in Revenues compared activity expect services, million $X.X related experienced pre-provision market to in Slide expense million Corporate were $XXX persist. quarter capital diversified term income were were our the continued the segment Net up advisory was of close, driven our driven quarter across and volatility as from of organic by this XX%, To banking ongoing spreads net earnings all banking of the strategic our treasury growth funding lower our credit to next in partially as investment if Other more a in issuance, increased of XX the continued and We segment. profitability speaks in last million offset of significant originations X% businesses, quarter both operating business. anticipate Markets, up year, market markets to The billion Net in year. compensation by this prior momentum up $XXX same well, loss foundational moderate financial towards was of second the in short complete of growth. we uncertain in results to our performance year-over-year. demonstrate to results support elevated muted as growth. million Slide environment. corporate employee-related the Expenses conditions $XX segment XX%. largely the by in by quarter. and notwithstanding a investments and strong $XXX of direct fiscal decline as more and loss increase XX% current investment as XXXX was pretax remain XX losses of up reflects our the driven in revenue while the

to mix, of diverse client-focused to our Our shareholder deploy Thanks growth balance disciplined sheet well-positioned continues growth in fuel and the to operating capital our turn to provide business to support organic and to our allocation flexibility that, Sean. clients a solid over call capital us to order profitability. significant franchise, returns. with and enhance With to respond across are client in approach we environment changing continue delivering to I'll strategy,

Shawn Beber

and Hratch good you, Thank morning.

Our and are credit quarter performing performance was this portfolios our well. strong

we levels activity to proactively our environment continued support managing coverages. while clients our and remain the response evolving risk with have to in We and comfortable underwriting our

QX which It's Victor the and credit As been reflected has credit or mentioned, slightly acquisition the in losses in of better is than closed Slide a of our an very reported performance and adjusted basis. in XXXX, card a we our quarter expectations. also portfolio on second our credit our line XX portfolio, Costco results. details both high-quality and for quality provision

Our reported was of last $XX with in provision million quarter. PCL million $XXX compared a QX

have rising on with portfolios. spending as and as better were the our Impaired clients The losses Excluding reverting PCL begun fewer reversals. higher patterns. adjusted QX. is Provisions some interest provision continue up card $XXX the continued from impact We're write-offs performance was this allowance than this X an due of quarter. performing perform the Business allowance the in credit quarter provisions and item government aligned This of performing was million pleased pre-pandemic and in rates net our business for impairments our $XX million Personal quarter, to expectation were due Canadian strong portfolio our slightly in up indicators Costco deterioration Banking to which is modeled loans pre-pandemic. Stage our on higher in and and to adjusted our last with million to in forward-looking credit reflecting note, to acquisition, treated $XXX Provision loans was related QX. impaired of

was our by growth allowance portfolio allowance offset impaired quarter-over-quarter, points partially to associated Turning build allowances mainly XX, three release, ratio to portfolio net down a in the and attributable basis with our the coverage slide Costco acquisition.

dollars flat quarter-over-quarter. allowance were Our

have from been several as favorable, quality. of above the have be debt of and our been respect year. overall market quarter, with down including down XX with We our to credit have time our continue risk backdrop evolving average well. in Against past of have incomes, XX credit mortgage has quarters, higher continues of remain observations. impaired over with due gross over comfortable our turning banking We're portfolio to portfolio, with down to to good the to deep with has larger XX% relationships credit to QX. government details strong portfolio, our levels. origination mortgage balances and a mix. government and portfolio of which XXXX with who loan QX Consistent the portfolio diversification were slightly, and loans. remains Retail loan-to-value the XX% the Client values while a a have The increased trending and our Slide rating currently the business down service The client The And make originations new over mortgage our few gross portfolio. impaired to equivalent coverage deposit metrics strength higher stable, uninsured write-offs. average ratios, has been two and impaired stable QX details and have experienced and clients been lending last scores pre-pandemic in our the and our activity quality is pleased majority XXXX. over I'd for business years, originations XX%. remained BBB, previous were us. Slide decrease an past reflects past balances Overall balances quarters balanced to our this portfolio of in perform trended

Costco as and pre-pandemic dollars of expected amount impact line in spending in trended portfolios. write-off card and increase consumer remained flat personal contributed the continue Canadian lending gross overall of offset and quarter, a this performance. have Net loan than relatively run the and illustrates card QX strong stable in we clients XX-plus dollar in portfolio new decrease to to day mortgages, XX-plus retail rates write-off as to delinquency reverting days the also rate. pre-pandemic with the pattern. slight begun higher our our the ratio write-off residential closing, Slide formations a and lower small low perspective rate remained our see formations impaired by in acquisition. a Overall, remain New historical XX net expectations. with both increase delinquency QX from The new partly a Costco In

performance credit though normalized to return year-to-date been over time, We favorable. more to expect losses has

We inflation and broader pandemic, potential I'll impacts that are, the outlook. developments environment geopolitical closely affect the the and for Operator. turn of from back rate now monitoring the to course, could our call

Operator

Thank Bank you. from question from We’ll take from the questions now Instructions] first of go lines. ahead. is phone And America. Please [Operator Poonawala Ebrahim the

Ebrahim Poonawala

about expense the Good sticking of morning. going we hand, maybe through next should makeup slide expense inflationary as look I think look particularly provide to quarter, just If into leverage to one talk pressures half, also of out Hratch. the could as spend, in expense on year-over-year growth? are year, guess, remind pull we XX that flexibility expenses, on either how we talk this or probably breakdown back we back operating terms about expenses you into the And it’s us with the on to growth the higher. us push

half going the if pull guidance, to we are not back investment of Just process we as you how to? versus areas think think give about year? but to And us need give XXXX, just thought a any of realize about you expenses I around the back sense like spend in

Hratch Panossian

into everyone our color, you, here. targets context, and in our Day performance and couple lot provide investments more we've remind certainly a weeks for financial get XXXX a which our a But Thank of about from plans how Investor increases not some expenses changed. in we'll question. I'm happy Ebrahim, the in have perspective, I'll to as our and

ability leverage. make to target to approaches and operating continue strategy adjustments earnings over to time, order growth the We allocation continue our respond And believe to pre-provision that. in and we to and capital we our positive have deliver the environment that through

We there look takes, pretty I X% able positive are and year, XX% at quarter promised but as overall growth so we to operating And and felt about had that. leverage. some the talked good that earnings last being puts fact this about we to pre-provision deliver

we more expected extent on fact, pre-provision to than deliver. some the deliver side, feel what to we will we had In

impact in And here, you're things of have outperforming cost so on And about. we at efficiencies, that terms approach. I'll the look we had more environment of talking the in probably in successes against are environment. and the a aware which There's our expected. than impact that increase. course we're chart we got our X% had of been But in the this We our normalization pressure X% lot about the cases, But that, inflation expectations. of half-ish highlight there that have staying been, some we've operating the of

looked pace at strategic extent. have to We our some them and investments

year. we've through so we ability reacting, rest the and been have react the And already the to of

Now our on in we've of buckets that's will have expenses now point quarter. up program that impact strategic impact And start next We'll ramping two plateauing. had that, full and we over I out we're the Costco, been big highlighted. this quarter. preparing those partial after bring will to investments, that a as and you'll several see quarters

see of this up, investments plateauing has end ramping US towards that which, Our the the again, year. franchise, but in been we

continue a to so at and and investment investing increase will level, we expenses causing that, in the some that was to will moderate. high room And step-up the be us, that for there overall, but that accelerated –

back next year the the of So of half into I expect some that would going year, moderation. into

of that still expected range. in to than side headwinds, right And leverage for offset this think that a move percent, again by better have be striving But day to for Every some neutral result less earnings we'll year. deliver we we'll of there of is levers to, operating be this able pre-provision and if of are net-net, we We obviously, to a less that year. and positive that I able the for need to we what couple passes, pull lever. that around

Victor Dodig

with telegraphed And our this to build we've remarks, Hratch consistent is to investors. just all Ebrahim, what on

enduring We strategic revenue of pre-provision scores. growing market-leading value. client with grow, of client improving profitably client that market-leading you franchise experience grow way our are see by And focused relationships deepening investing in share our and growth, to market terms growth, are our

as investments, that's I our peer forward. will of most And above look thing we think I what above note and at between continue So investments done, all here are we've group. we've is linkage these what the delivering deliver and going to and important what them growth to telegraphed, we've what delivered, market the

Ebrahim Poonawala

you. Thank Noted.

Operator

Thank you. The next question is go Canaccord ahead. from Genuity. Scott from Please Chan

Scott Chan

Thank technical large FI you. to on the XXX Good morning. was it's Maybe think Hratch, There's maybe X. quarter. on I question OSFI, just a slide gain similar last another it like

around to is Just some that that maybe forward, and some maybe of persist standards? historical or guidance that going on towards should kind moderate context going

Hratch Panossian

the a in Sorry, muffled bit question. beginning, so your didn't beginning part it hear the was of we

Scott Chan

just supplemental, quarter that wondering, Just last XXX instruments. there of get in lot I'm I million the you gain is historical Did think the a it's was what and on than a standards? higher as X, was. large slide financial well large certainly gain a

Hratch Panossian

highlight that ongoing that something Yeah, be nothing I would nothing would respect, that on – basis. an with

Scott Chan

maybe And Okay. mortgages. on just

You to mostly? competition talked pressure. due that margin Is about

Hratch Panossian

the PBB side. margins and the some we But some we are a from jump of perspective. said on of there the here as we I on pressure can on pressure – And Laura was referenced that – Yeah. business seeing in and mortgages did

Laura Dottori Attanasio

margin yes, incredibly costs, that. whole environment say, seen rates. market's say, Hi, we and I'd I'm lot did did economic our a has industry see inflow going the Scott, our rise been faster compression to And say Yeah. client I'd than competitive. funding see of, the

we to them when spreads our see back of sort mortgage we comes And through we system. its the as slowly pricing expect to works the improve that, when increased is half So inflow way the the year. that's it expectation enter of

when market seen in last to months the position comes – pricing. mortgage raising over prices I it we've you've think taken few leadership

hard working restore, we're sustainable more I'd say, So margins. to

compression that off see mortgage half should some we margin the this as the get year, through of we come start So to of book. back in

Hratch Panossian

you And question, maybe sorry, I if if slide in I had jump think wrong your on -- reference. the I

slide to typically referring in the the other value the that related I trading referring to and to fair coming think revenue, That's trading through revenues and you're line. you're so strong just income the X, coming P&L.

you saw reflected there this revenues. quarter, in strong So last quarter, the revenues trading trading strong

Ebrahim Poonawala

a lot. Thanks Thanks Okay. Hratch.

Operator

from question Please Scotiabank. you. go ahead. The Thank Grauman Meny next is from

Meny Grauman

good Hi, morning.

question a on cards. Just

of just First, in seasonality, terms is line that there fee down the something that? driving Is card numbers, just sequentially. or there else

Laura Dottori Attanasio

Good morning, Meny.

Meny Grauman

Hi, good morning.

Laura Dottori Attanasio

that. take I'll

So on improvements we're I'd say, actually continued volume. seeing, cards, purchase in

Costco, XXXX levels. So up And we're we're up from XX% I XX% almost when year-over-year. I exclude about think actually

full going to you we So have are seen, I'm the say, recovery, travel, if will, in entertainment. hotel that categories

good. everything is So

one quarter-over-quarter If of coming quarter-over-quarter that's this quarters. better just actually seasonal a where at has down you're look when really will, seasonality. you looking bit, been if we you our at over But see, things go back decreases, the years and

would it pretty good down when about flat leading strong have value think, we again, those they to say on that out does, we well-positioned purchase very just that balances, given, I would growth, cards We've is there. of on market the the increased is for do new before also coming propositions are and growth. volumes again, I the been revolving feeling our growth that, and sales going portfolio now account has remain well, still interest-bearing the the What account days we been as cards, March, above into were it a that say, performance. it's we're year-over-year basis. So our calls, But And as And card seasonality. balance bit I though, did those some in all translate That's previous I've take time new quarter-over-quarter. mentioned a And on card Costco. it's expectations. well, have well early in of Costco excluding

go-forward looking are things think good I for basis. on a So us

Meny Grauman

And that. is segue. for Thanks good comment your a

opposite just you The thinking tells the second consumer. Obviously, you it, of about look about card versus when worried do me about signs is when But my there's the story. that there, stress just question everyone borrow part -- look the see downside the or wondering recession any and about at of if you what health it was at actually, that, risks. I I’m of any spending tells

terms perspective the on consumer it see just the book? there the So health through in card of you of your wondering lens of the as

Laura Dottori Attanasio

feeling the, We're I'd really health consumer. say, the about good Yeah. of the

We -- we through the pandemic. are seeing it again, saw

see, cards to would and whether we if were look than better or When much our prudent continue are will, client -- very rates, they lines I it's look at We pre-pandemic. things our we you other unsecured say, behavior. actually utilization at

HELOC. we look to utilization want down. so at And I say XX% when about our or rates lines even are unsecured

XXXX to So compared XXXX, they're in back XX%. people seeing pre-pandemic business, cards if it, so From to we our rates. down, call today, go see we to And our X% revolve less. and

seeing very it making prudent their cards. how behavior comes debt and we're are they're managing payments to credit on people So, when their how

very the from pleased with our clients. that very, we're seeing performance So

Victor Dodig

very well card our built portfolio, What strategically positioned going forward. for portfolio And with is a what's Meny. market-leading we've here growth and happened

be message most You and plus non-travel the from look don't the portfolio the and increase clients future the small growth of at The goes forward to bank card our few best business, top is in Innovation end us with continue card large deliver that on. the about that Banking, are that X a growth. able lot of we're investments going will business important North portfolio, Both marketplace. a marketplace. And rest are Costco, one at growing to card America investing portfolio US the those significant these the of of and that's going for narrative the due the that's is in owners. and contribute of And for forward. affluent going why of list us million And the us portfolio, that in we're market. onboarded them an travel to CIBC banks majority newly the market-leading the We're has a card the from confident why minority to to are investing differentiates

Meny Grauman

very Okay. you, much. Thank

Operator

Bank Please, next Thank Gabriel Dechaine from you. ahead. The is question go from National Financial.

Gabriel Dechaine

US last I'm to quarter, there the adjustments economic morning. driven -- change Canada that's than the get mean, your there more it by sense provisions Canadian the factors more GDP of in than others, mainly excluding by versus the one for forecast -- Good housing looks housing kind to price conservative a question GDP, Canadian of additions is it any mean important to I My US indicator, forward-looking much the is index. and stuff. caused just the forecast? these and I influential in Shawn. Hi. seeing indicators. price performing, GDP Is Costco more the of

Shawn Beber

the Great very would question. right, have the We're with the impaired performance The build, quarter. the pleased you're Costco Gabriel, FLI perspective thanks -- excluding from the loss the question. on acquisition this an driven performing portfolio. for

those it in quarter-on-quarter, flat small some of resulted this reflective FLI the context is significant and deterioration in Given is debt significant the a which But the of the change, interest or of environment sort the of the service more knock-on ratio build. in impacts. item the more rate quarter, higher

sensitive one ones really And of GDP of the of one impacted business so, that's forecast more quarter. in units well. some say, ones the this growth the The I'd this was influential quarter. But DSR as more the deterioration

Gabriel Dechaine

that just one Where -- is these -- in -- list you it's don't not

Shawn Beber

It's Yes. X. Note in

Gabriel Dechaine

Okay.

Shawn Beber

Yes.

Gabriel Dechaine

take look. Thank I'll you. a

Shawn Beber

Okay.

Operator

Thank you. ahead. Please, Mario question from next go TD from is Securities. Mendonca The

Mario Mendonca

in that me formations. or Shawn, Costco, PCLs predominantly the could a Is I is And Good think help you understanding increase think understand. going with I described in I in personal any but impaired delinquencies the didn't Canadian and you on see else something there there? better morning. of I increase deterioration business, can it, do or

Shawn Beber

again, in from for have for an change those and, impact the also performing so debt remember impaired component it's both a mortgages, knock-on a from has the to service them when perspective losses loss when No, perspective, a both That but portfolios. and that the impaired FLI coverage also occurred forecast. for that and modeled personal the

what that than you're in the more PBB half seeing, modeled FLIs. was a So of of that's the build results the reflection

Mario Mendonca

Costco, And modest then? be would a portion

Shawn Beber

Yeah.

Mario Mendonca

to it I all it banks, expect and you the shouldn't don't just bank? other I play I DMC In did No, of only one Is for expect quarter-to-quarter? the we saw this match have is sensitivities, and own banks out out. this case models to play any but no their on where sort other comment see

Shawn Beber

really have based interpretation we've our comment We've we generated when understanding can't obviously models. FLI, and imputed I IFRS our of built the on results seen. you've follow X Yeah. it, on banks. other the our that We

We've quarter-on-quarter. see growth variability had the could So also in you significant portfolio.

So had that release. the some provision. We've also performing impacts

and releases oil the as outlook was a quarter-on-quarter, capital well, a in You'll had through results modest improved markets, we've if see we may related gas, improves, deterioration and so have it release build. could that that our but to improved the there the as macroeconomic And came environment quarter-to-quarter, – given seen deteriorates, and we specifically then from for outlook. results. about, But as it see talked a we

Mario Mendonca

use probably a or have Then question Hratch. their different banks for Okay. our All to grow capital Victor in broad then, ways.

bit forward. manage suggesting clear not would organically. maybe been RWA it Would may doing ratio we've guidance I mean, the remain CIBC's back pace checking be stable little in are to that manage RWA closely? a past. going same now, should By appear that will capital in we to see I has the bank acquisitions. that RWA little or it a It's with more that seen and But the that few correct little me growth the approach Some more grow the a a at growth that, your

Victor Dodig

a good that's couple absolutely organic why I'd Mario, that of right you're morning, growth. in unit see on things. business we is that a single that's And you'll question. reflected our highlight every good focus run. that One,

growth. client-focused it's and growth see You

meaningful markets. where good are that at. capital If you very deep, XX.X%, client banking on we to from growth, there through about right At feel the lift relationships personal hood we're

the We in banking allows all to us the have market They come to grow. the And cushion sector. continue to banks the to it with volatility. room deal any may

high growth have pace be going will of top may client the profitable terms peak of the win rates, continue market, the share but at You end to we seen market to in relationships, win forward.

changes grow that in articulated capital, various continued some year past. that see through we've that the continue and will the avenues will to give next that excess add and deploy capital to us to You'll capital Basel-related

sensibly. So continue profitably we like at feel to you'd and market, good to level about anything we our of to strategy know do top and that. of it to organic the add growth, don't Hratch, And we end feel good the good about grow I it capital, do if our about our feel level of

Hratch Panossian

As Victor Mario. deliberate covered, a this strategy, was

a reminder, that of more as decision with and will did only the maybe pandemic we capital a were peak the of to coming growth that, communicated and in term. avenue Look, the done good than we we always the So a we capital talk liquidity, about We've Days. conscious of we've and capital organically, including have, for deploy good out particularly levels use I'll is thing long as also better a past, good organically. have reason we we we in M&A growth feel lot And we do right, can in that add, grow as Investor M&A, we opportunities believe are as had capital superior, telegraphed made that organic the we to short continue returning but shareholders. to any to returns that other

best on focused we have. and lever tangible our generating are And We shareholders. value the for growing value is that tangible

it. on leaned we've so, And

deliberate said, this forward, quarter, by which to even my down said onetime that out remarks, there's be our been deployment buffer. comfortable would that continued on back an still from be a generation feel excess offset volatility, and And we the we balanced Costco, so At capital and planned. out is the organic point, bringing we've expect which are point a drew market I take your through more see the this will and basis, was a you'll right, of on that we will I some return levels where, the Victor of on, in and organic take deliberately capital. deployment now, as position as capital But down

we a capital allow minus with those. still is but investments the the capital. generally capital-light example. and grow some the on of deployment, more we of is we've investments growth given around be we'll to So, so back that will level now of made made that these us Costco expect on allows what levels, or plus far us good

against RWAs a that that now will have of portfolio. We be lot franchising there's capital more opportunities But light.

to us pre-provision have to and from flat that's but continue earnings the here. grow, momentum, what so And now allows keep capital more revenue

Mario Mendonca

you. That’s clear. Thank

Operator

Please Persaud Lemar from is question from Cormark go Securities. next The ahead.

Lemar Persaud

XXXX aware, because contemplate rate they rates throughout the builds, rates, to higher, XXXX. My of question debt coming impacting for the response to estimates move Should for question expect still if bill we ratios, Thanks. of Shawn. as the performing consensus is a Banking number just course this Gabriel's quarter. and you're continue interest on back interest Maybe hikes further Canada just to service additional the

So, there. leave I'll it

Shawn Beber

Good morning Lemar.

So, rising the FLI a rate environment. contemplate

forward-looking. they're So

environment. in our forecast reflected quarters. the current to rising be. we've environment basis maybe into rate built captured the it, we've of going our is move XX that say So, we've view of rising that But is what outer extra point view rate I'd an

as expect function that of unless materially, wouldn't to builds just So outlook changes a see then we additional that.

Lemar Persaud

Okay. That’s Thanks guys. it.

Operator

Please question Movahedi The ahead. is Markets. go Capital next from BMO from Sohrab

Sohrab Movahedi

you use. the do you're models delivering, stand the been on I going tools Risk teams I you indicators today, the all has and come on back are the spot the that and to you I But just – and of want the I'm you to Officer, quality back the about – hear the and Shawn, to management of as qualitatively those guess guess just Chief forward-leading the I you. growth that think IFRS reserved? when adequately portfolio feel bank outlook, you the and

Shawn Beber

Good the a look we're comfortable morning we've question. the with our Sohrab. say portfolio business great perform well. the when that to It's we underwriting yes, the we've place. I'd portfolios, very growth across that When had continues retail we achieved businesses, look and in our government various across and across

well. us I think positions it

if -- provisions. in performing then there's way work, last reflect quarter. As change from deterioration, that the the outlook said models we our the the we reflect you in and have results the a know, economic We

flattish stresses. with this a good quarter, but the We ahead. we've this prior feel performing talked so you up said, provision, road and And seen portfolio wound We've very as about near-term some see I don't -- in quarters. our about

about frankly, quarters. there's pre-pandemic of But We reflected coming of strong. several expect expect that over feel the which provision. to our the is think, things rates time to see remains sort out those get coverage, uncertainty loss of the as there, allowance sort over We of some I normalization some in activity, performing good level

Sohrab Movahedi

you because factored here, -- negative here GDP a one should ratio, like forecast have forward-leading I rates. -- I in or service and I the area a yet indicators, growth that there think that. you, could addendum unemployment suppose, to another it of about unemployment say as higher as debt a you your to I the countervailing thinking think to mentioned are was of just is into fair how guess is And kind that that that of that the think you become the rate And I outlook, how rate balance

Shawn Beber

Yes.

this was forecast have -- the again earlier, small to the the X, in performing. quarter the unemployment forward yes, saying as one that one the coverage Note certainly the was continue we factor for been a particular disclose of into our So, we rate. there, service -- analysis will of FLIs, on debt changes There it's but as impactful one going I

Operator

next is ahead. The you. Veritas Nigel Please question from go Thank D'Souza from Investments.

Nigel D'Souza

Stage math you for relative tackle pandemic. for Stage a my to X Thank about I prior on card disclosure XX% way. your And loans. loans, and Stage personal you. running different When that's had about Good your to at a XX% based wanted allowances at of both performing portfolios look X, loans, it I again have on credit the loans guys. in X sitting to follow-up on and morning I

Stage a of of that being now get back for Stage to the loans of trying ratio X? I'm what's -- in those So And sense what's into portfolio into the about X? migration XX% preventing

Shawn Beber

over But watching some with said, build. I that the still basis over provisions balances XX basis environment recall, then points. would at builds of from reflective of the overall -- happened. continues the started the improve, released as coverage course of as migration having performing as extent on they XX migration FLIs after To our you XXXX. to We're way We now moving to So we're points -- that perspective see the It's have, time. at of performing we course the expect our a the had closely. we

Nigel D'Souza

an trying I'm here credit a in increase represent risk. to get So understanding loans significant X because Stage

that judgment portfolio cum should your card credit what's interpret So significant increase to vulnerable is your credit exhibiting we of a risk? credit significant personal expert as XX% increase in risk, a in that credit

Shawn Beber

in the the watching those did indications same subsequent see We XXXX. course and over judgment. could recognize And that those to We're for did. to migration. quarters. to continue we continued that in that through of at that -- areas portfolios, coming some that continue you And extent look it Well, exercise of positive

And so over it's XXXX. of really a the build of reflection the course

Nigel D'Souza

rationale your with in X% pre-pandemic? And that's for same Stage book I mortgage X% the X to assume versus closer

Shawn Beber

Correct.

Nigel D'Souza

Thank great. it you. me. from That’s Okay,

Operator

is from question next The you. Doug Young Capital Thank Markets. Desjardin from

Doug Young

hear Hi. Can me? you

Victor Dodig

Yeah. We can hear you, Doug.

Doug Young

Okay. Perfect.

businesses? to part year? you many or it. this read the feel growth level feeling normalize, growth. this that every one you commercial from quite -- you loan very hearing curious, you should that's over And level Just just and it has I'm and question of the there to the are Because what growth on. about had we day? what well, a Canada area I've on people, for think the more to seem what Obviously, of more you in continue when so drive what paper importantly, And this team does of is of been expect obviously then the that coming strong the counter and focused I think US, an you can

Jon Hountalas

Good colleague, start over my question. pass Hountalas. morning it to for Mike. and and I'll thank then It's Jon you the

business quarter, later, It's three down price Demand we get continue are good. And -- I confidence it's confidence was for to and people a still for on. sure, increases feeling is is miss. but challenge. Supply chain Labor nudge passed there, product hit remains strong. months today, still strong. a last classified asked So I very is in environment, the the about when question

Some people worse. But better, overall, tell confident. me people some remain people it's getting

and growth, this Canada particularly mean So of quarter was in I strong. terms

were we I see X% think don't in growth. that. think loan you'll quarter-over-quarter I

historical low go digits. Mike, I it market. pass us you'll back think the see I'll we'll rates to double healthy normal And our outperform think I to you.

Mike Capatides

Jon. Thank you,

US, the our it's book as of same our Jon and in clients described. So commercial the in just with more

cautious on as you our building remain they're inventories, more to rebuild levels. employee chain back in shortages and They're as they're And utilization meet the US. historical up reflected demands growth, confident. dealing they're a the supply but that's Our real in clients our more inflation, getting bit on and estate revolver focused they're to with, housing to issues, mentioned, borrowing side,

it issue demand And describe as to confident. That's is They're we bit sentiment what mostly, revenue but the is had for of if a So experiencing concern, for telling XX% this and in at US, looking But compression. good, US, the our margin that they're spot an growth. Jon, very sum commercial that us, them. can not clients, as you moderating. the range in see still see the see to we We double-digit still growth to that healthy a year-over-year. on basis, had they're Like expect got forward. moving we in we which growth up,

Doug Young

US. taking Canada And you're more market a there or doing just you're and sector Is a quick that share? follow-up maybe where for particular and particularly well sectors the

Jon Hountalas

broad-based bit I think Canada, on industry Mike? us, a estate, It's we're XX% by the is little innovation Jon. geography. In XX% Day. We'll talk doing Banking. about growth by real been That's a come and very has of for And come and about well that Investor from very focus from there. has rest our

Mike Capatides

quarters. from and A a prior little US a the bit in reversal bit of different

growth we've the forward. coming were side, strategy our simply, and to mentioned part past a earlier. both investment in our all And and real past C&I customers particular. the also fair in couple brought growth it's of portfolio reflective It’s estate in expect new in where Hratch country, of of on quarter and bankers, of they're around growth US, offices and online. the teams, payoffs it's where area. way C&I the going Put products, But we businesses and the of continue of lot Victor that in that the We Our new seeing led number quarters a the that's on new organic in working. our this network

Doug Young

you. Thank

Operator

Please from go ahead. Thank you. Capital Movahedi question Sohrab Markets. is from The BMO next

Sohrab Movahedi

sort the you'll What keep complying rewarded there? are level. doing We rules Markets we at think loan is elsewhere. there I at in Capital segment, you plus this? trading here. growth mean, with Europe, I in of it But think Harry, sustainable record how And loans get on Capital Markets, the I differently revenue know XX% a looking

Harry Culham

very question. Thanks for morning. Good the much

So, it's more of the be honest. same. I'll

well-diversified a have We franchise.

growth, asset our insurance client In across pension of is well include plans, companies, our franchise, loan both would which the corporate on diversified terms it private managers, of across institutional the very franchise, border. sides capital

wealth the I clients, As commercial extremely taper is last capital retail we've down capital-intensive lending the our importantly, We're we markets was platform. our businesses the just think growth nontraditional good seen in And from I such in our deliver double-digit to mentioned year-over-year X%, US XX% in seeing around average off throughout year. growth The across our saw see often including quarter-over-quarter very and XX% results year-over-year increase we're servicing less to growth as foreign and exchange. franchise, We trading trading XX% revenues. so But I quite seeing team fact, clients businesses, last on balances the with revenue working well across quarter, growth quarter. mentioned. products growth of more in expect very,

it's for across really, bank. Markets together, our product suite. So, all Capital The coming franchise delivering our

The is environment we're is our So, on strong. pipeline we're optimistic quite cycle-tested environment, the but with is a outlook. standing the clients. business. It quite The

pipeline deliver earnings can to that that we strength the of I'm million growth. $XXX that [indiscernible] So, the optimistic on continue given plus

Victor Dodig

another build business in Not from to And notable. of markets is to relative strength our is our our on Sohrab, group. just Canada, distinction peer Harry's comments, only capital our bank point

in US at other connected in comes revenue in the our commercial business. but business we'll wealth the through and overall deeply more banking in to we financial services have partnerships capital growth markets every Our is country Again, retail direct in Day. Investor something our $ bank outside banking that highlight our notable, X and retail, one that management

Sohrab Movahedi

Thank you.

Operator

turn phone the back time. at questions Thank I'll Victor. There lines to no you. this the further on call over are

Victor Dodig

to then. to ourselves our CIBC thank our you shareholders taking bringing and much, all by your very questions. day. XX,XXX and play just to Investor and each speak spend our you'll you time for continued in in learn you bank, questions. our operator, about team for to and opportunity great off And at your to this to sell-side more members with for forward our close And we wanted seeing a couple where you support team. weeks thank Have good you Look I clients purpose will good and for Thank critical day. a with get leadership a life you analysts, your our every thank and role for more who to Day, our of face

Operator

you. Thank for The now Please has lines ended. your participation. this your conference we you thank at time disconnect and

Canadian Imperial Bank of Commerce (CM) 26 May 222022 Q2 Earnings call transcript