CM.TO - Earnings call transcript Q4 2022 | Canadian Imperial Bank of Commerce

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Operator

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

Geoff Weiss

Thank you and good morning.

and morning’s and opening by Chief our Financial this Dodig, from Hratch begin Chief Chief President our our Executive Officer; will presentation remarks with Victor Panossian, Risk We Officer. Guse, Frank Officer followed number call Shawn heads, a U.S. our group Also on are of the today including Beber, Management. Direct Culham, and Commercial Canadian Jon and Laura Canadian Financial Wealth Harry Region; Markets Personal Dottori-Attanasio, Hountalas, Banking Services; Capital and Banking; and Business are available remarks. take following questions prepared all the They to limit please your to a hard X:XX, With at questions stop one.

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

Victor Dodig

Mike. of on region. am new introduce Guse bank, across in new execution leading team Region, U.S. Mike has his also My our and fiscal pleased Private the focus is succeeds acknowledge details, of morning into U.S. everyone. with our going senior Thank instrumental Officer. of our acquisition Shawn was he our U.S. more are our our year Bieber, and region. leadership roles I remarks client I business, for this performance our in than U.S. USA. focus who recently, CIBC get to most in of to and achievements year strong as most Risk Chief past will deep you, But Bank on Bank to Geoff experience, Head XX our the building continue roles outlook ahead. taking these in developing And the wanted momentum over of CIBC Mike as the Capatides, will focus client Vice banking good year. our I Officer, and Shawn of on and before in members relationships role transitioned our XXXX. With recently new our to Risk knowledge Chief deepening start Frank we Chair, the years the our proven on leadership morning

businesses, be client-focused in result most fiscal risk Some billion last delivering by credit for Frank’s strategic personal his from coupled portfolio were billion making impaired strong the results leadership down were may in off and to strong are from going facets fiscal business across him year. the perspective, releases pre-tax was credit and XXXX provisions our changes in and of performing and with of more continued our a on These growth, in of down role from per year prior forward. coming and last of strategy you execution direct the transformation up strategy all which position pre-provision of of X% robust familiar talent a adjusted we us his Adjusted result compared X% new of of turning remains leading Frank volume year. XXXX. of in business was a share $X.X growth all our year, banking. net billion mainly $X.X and will earnings or $X.XX that normal investments credit provisions XXXX which the management, global The quality X% driven our our focus relative beyond. revenue and to benefit with But with expertise recent role. experienced leverage up allow full year to X% internal was they These fiscal results, our $XX.X of earnings outperformance well

our current capabilities. and negative we operating fiscal year leverage Now to was growth XXXX and made this it investments in relates the future in

drove the in year-over-year and business well in a of normalization initiatives employee-related compensation as structural While single-digits, activities of XX%. strategic growth investments remained expense development our mid expense as growth

our strengthen many previously to and essential strong to as were growth our investments our of in units. growth line across compensation-related and key we market to conveyed moderate we now more expense shifting range, position mid business XXXX seeing the top in come With to single-digit are the generate we now investments are to strategic results you. accelerated Our completed, have

capital strong XX.X%, with ratio Our position on return a while of equity year was CETX for the remains our XX.X%.

platform. Investor progress our announcing between segments our for ratio the technology out back our future enterprise touch XXXX, across bank. made in experience to elevating renewable focus well-positioned clients continued level, on Day. shareholders progress, dividend banking we are lot we fiscal as and energy making Reflecting and high on the journey. are in Innovation We That’s we are increase investments three connectivity where our priorities that increasing also in the further particularly common are growth our capabilities on key $X.XX strategic on laid in client-focused and have our through a payout XX%. fin-tech franchise, And a our at high XX% investing while of our we At differentiators, we notable growth, delivering we maintaining Banking

we since share from the to of index Xx which carbon affluent over momentum submissions announced oil our and our in demonstrated XXXX, net As our of growth that to our the clients XXXX gas and in intensity are & Business Banking, our we added almost XXX,XXX net-zero positive segment, In with targets ambition, segment. Personal of bank, generation finance well, strongest of we support Canadian power interim XX% in client reduce portfolios. new where the market

to addition services. already Again, new days, XX,XXX clients these clients of CIBC successfully to heavily hold And over these banking the million our products to and tilt we clients. over also with still relationship card card segment. have early additional transitioned this, it’s deepened In Costco X affluent co-brand we while

X% focus relentless versus in clients’ success living And our X focus year-over-year and gains which and our is and a have outstanding tools share advice growth with ambitions on the done in our we make client both ranking bank of Contributing purpose Our second for enhanced term. to our big that Client XX% the reality. our experience in group. client by that’s the rewarded place introducing drove long J.D. being business and these respectively, to positive for on recognized help for underpinned deposit for Satisfaction digital outcomes resulted retail were delivering by and efforts peer Power asset market a the banking growth Canadian digital this our franchising digital Survey and And clients, banker. by

integrated higher Wood have business tailored client industries, to conversations. record year and Management Commercial of Commercial which compared demonstrated Banking wealth our growth up CIBC net Wealth, of to systems In with our we modernize prior expand series enriched Wealth banking and XXXX, franchise Private and were Banking, new with strong and a to exclusive further we Canadian wealth flows. launched we high our deposit programs processes XX% Our and with offers. loan The is private In along streamline support to throughout momentum net inflows continued respectively, planning our Gundy of XX%, XX% support growth year. professionals net a added the result franchise, to also

Mail. X Asset to top on private year, incorporated in private Gundy’s investment the third impacting big challenges were net investment of banks to Wood strategies. policy focus Despite Global net wealth sustainability AUM. of our and Canada’s in listed industry of advisers our offering our CIBC a we mutual flows long-term This responsible across as continue was investing fund Management, the as and XX strength Our climate is we all a And advisers Canadian by flows by CIBC bankers. policy advisers named and ranked wealth percent underpinned

had and technology of Our loan business XX% It the Banking made was we and growth three investments Commercial going was U.S. and In Management growth. up significant forward. and to our infrastructure now XXXX, support relationships. franchise new that’s originated client Wealth and from quarters that above-market strong in

drove private and in Our client and private focus banking the also on client of strong high-growth X% economy wealth growth funds. segments

efforts to adviser continued a Markets, Barron’s XX In investment ranked to as Our a franchise our recognized third U.S. deliver consecutive best-in-class differentiated top by registered the Capital us for model private business who again results. were wealth build year.

Our from XX%. strong U.S. our with presence connectivity from markets non-traditional rewarded U.S. capital and focus the cross-bank growth clients of and revenue XX% on growing was of

strategic the expansion of vertical. Global for including our leadership outstanding In made of were green the sustainability-linked regional transition in renewables transition in energy recipient industry XXXX, areas, in we bonds also and We and high-growth awards Finance’s investments North American bonds.

tables, top industry most We the in also continued North in recent in accomplishments rank our information’s XX notable America in to business. capital in the league as financings for tracked markets renewables

continue headwinds, is As tightening XXXX, to banks and we I in monetary growth to response take global and to to continue earlier new to to to the in client grow mentioned with my to to inflation. these our And franchise tame slower expected our to in ahead but XXXX just economic going these realities, policy range. to their central are we expense look our growth business continue remarks, single-digit also as as mid actions be adjust reposition moderate

While can control our environment, we execution. can’t the control we

the Over navigated forward. in so call I Hratch. the in pass to going to to we successfully challenging would have our through over to ability circumstances and We Hratch. confident past like you, are And do that, with

Hratch Panossian

share fiscal you on Thank our begin per from $X.XX a the higher going forward. XXXX before color covering and Slide for the with I of XX% quarter to some expectations you, losses. down credit prior providing fourth we all. X good earnings remarks will provisions for of reported primarily fourth the highlights deteriorating our of review Victor morning on year, quarter, due to Against my and backdrop, the

appendix the adjusted EPS of presentation, the was in note Excluding to $X.XX. items our detailed

and quarter, a made balance against While and our strong our progress we market priorities. strategic results impacted economic maintained this sheet meaningful financial headwinds

XX% net will value presentation losses focused down laid and days, my by $X.X of targets. charges this medium-term the XX. still year by Investor refer the for offset at long-term committed partly primarily on outlook, to to prior across economic targets lower for including on Frank The the while key a quarter. in was remarks further from note, as progress billion Day up which and To in Revenue presentation. a were largely to predominantly delivering all of of driving due was during X% a XX exclude detail highlights continue year impact against our in I volume in provision the that strong This released adjusted We fees. of were income. Slide solid X%, down with driven segment items of market-related June financial quarter end, will cover of ago on year. later quarter year, results, $X.X will income of performing reference trading earnings stakeholder compared expenses, Pre-provision credit billion my prior as driven of from was growth pre-tax result our a results. early loans against elevated to the billion change provision Adjusted the balance our last by net $X.X to and starting severance inflation this our from businesses XX% be out interest drivers remain Slide which up

was Excluding across deposit up by trading, strong and franchise. loan last NII our year, XX% growth from supported

Excluding changes trading, as rates. year bank product benefit points total comparable mix down prior and sequentially basis X interest and the was our rising more than margins NIM in balance was offset sheet certain across to of the

NII non-trading margins continued current volume trend segment margins. rates. supported a substantial or details low rising at Slide key deposits, maturity continue if will in seeing are cost preference and a in of towards continued the in non-interest-bearing and or XX growth we rates deposit benefit higher. stabilize our shift deposits levels interest We changes to are term in by from While indeterminate upward anticipate client portion the

rates. across approach income supports and margins to in the consistent interest manner that changes balance in sheet predictable U.S. Canada through net Our the stabilizes position more a is and interest

from As of benefited that through and will period recent from rates rates going higher shown interest on the the slide, approach we benefit lower steadily continue to have forward.

to on are lower deposits and or that originations relative margins Higher by of investment XX% This excluding are in points rates margins offset quarter, rising gains, than was from this more maturity the points, This of quarter, NIM sensitive. on last X XX in declined our Canadian CRA recent which the U.S. impact basis lower mortgage was prepayment interest NIM than mortgage segment episodic. X segment basis deposit benefited points more sequentially. activity. up P&C basis non-interest indeterminate

margins, deposit offset Excluding primarily rates these higher increased which margins core by higher the on gains, from interest lower to NIM loans. due benefited partly

We higher in anticipate continue positive to both a segments, across the trajectory of NIM medium-term rates. helped interest these by

deposit non-interest-bearing pressure in of growth Canadian continued and XXXX. spreads expect origination from we some mortgage However, the lower early part

which by X% income were prior trading year and was down up Turning X% excluding Market-related deterioration. prior due up non-interest driven predominantly of to quarter the market client activity. income billion to impacted from generally X% or businesses, prior volume by Slide the were were driven lower XX, of trading. from $X.X excluding fees over up fees year market-sensitive Transaction-related declined X% stable by and trading fees from higher

XX, including changing incurred repositioned in as business Turning severance expenses quarter economic to up in to we XX% the outlook. Slide the year-over-year, were response the

Excluding initiatives severance, was on peak. our strategic as in expense the was quarters XX% growth year-over-year past. strategic of in than Approximately higher of investment prior XXXX half lower related XX% to growth investment the to increase starts discussed in

inflation. in they were from excluding low prior expenses the the X% range, up remain Our and impact including year, single-digit base significant inflation of the operating

in remains to advance while over to our agenda. Our approach management strategic expense operating generating medium the positive invest term, to leverage aggregate consistent, continuing

our we this position through with the full last XXXX, stabilize and allow expenses, restricting well taken in core incurred resulting steps expenses around XXXX for as single-digit These have Day. pacing the repositioning for several us that such, other severance discretionary in quarter’s year and actions namely actions mid we actions. growth levels, As will to the over proactive our communicated Investor our team us investments months,

down sheet Turning capital The focus of organic basis migration. risk-weighted quarter growth we strong to balance on prior almost and ended a generation, from resources. with deployment from quarter. disciplined of points Slide We our continue in covered the XX, to credit growth modest internal CETX XX.X%, the ratio remains assets as X

capital well in expect positions context generation to continue We to going level RWA strong fund internal economic current and growth uncertainty. capital the moderating us our of forward,

the Slide income in in of Our was were last $XXX and continued of resulting of LCR and losses. supported earnings due Banking XXX%. Personal we liquidity business higher primarily & $XXX $X.X XX% up billion credit for unit to growth, year, was million, from average Business quarter strategic quarter moderating on highlight pre-tax deposits growth position year from last strengthened Net XX, higher our provisions same in asset down by this X% X%. a Pre-provision Starting revenue results. million down

and over in focus XX% franchising in strategic and growth strong net Victor as Our driving client and respectively. XXXX and loans client XXX,XXX in growth of of success, covered resulted net growth deposits X%

a impact of affluent momentum. net CIBC Importantly, this to year new segment, transitioned growth X% our are last co-brand the client the where million clients quarter large portfolio. and including year $X.X of was X gain higher continue in to the driven earlier XX% clients, strategic fueling billion by co-brand we portion These were share. along with who up same our sequentially, of acquired investments, the Expenses from over

XX% Slide NII, helped our Moving were from that growth X% strong up last Commercial drive Banking from market million, Management headwinds results to in million pre-tax income earnings Commercial up benefiting on management in of XX% XX, $XXX was Banking Canadian from in net net prior of and wealth to Pre-provision business. year. the $XXX Wealth year

delivered over net XX% provisions. to fees. from allowed to underpin driven income to up U.S. loan growth Our by of U.S. Pre-provision $XXX the from We next strong over of year. Banking net in impact enable offset results phase well regulatory above-market ‘XX million XX% decline market. over client-focused income, income year due challenging business and respectively Management higher ‘XX and XXXX, financial our due million expenses wealth client and shows Increased requirements. infrastructure by growth market X% fiscal in pre-tax X% wealth. an our were XX million, support and dollars, $XXX we U.S. net largely our these Revenues the prior interest this X% increased technology to investments the investment down deterioration approach flows deepen XX% to of period prior credit the fund flows partially $X management managed on earnings non-interest Wealth where in in Commercial in U.S. enhance billion Over and $XX and Slide private results support growth and in ongoing driving our related in invested and growth. wealth strategy increasing over us of to to and as XX% a net and XX%, grow were management deposit as private growing ongoing generating our referrals fiscal franchise

of strong over differentiated strategy all the segment capital markets to base results XXXX, up by of million $XXX a benefits $XXX to quarter in expense in by Revenue revenues treasury million continued to business. Revenues quarter. line this high-growth in volatility starting and in of in related year these of our well-diversified across in expect year. incurred resulting to on to differentiated income business, and experienced up was was U.S. liquidity, XXXX. million investments quarter strength quarter. franchise, segment Net the from of as our year, and XX% growth million DSS basis. impacted quarter. driven XX% next prior business $XXX in elevated full performance funding And Slide stabilize our & pre-provision with higher headwinds which of largely same part pre-tax year, well were $X.X year elements around last XX% unit. earnings including while in costs severance of this In our business, by results were interest the the and was a were commercial in to from XX% was for margins. business. with the market loss large FirstCaribbean XX up The core lines compared Other from due X%. and of the driven $XXX connectivity moderate as the the quarter. the reflects We the speaks focused benefiting in in markets our contribution in million Net cost $XXX Slide business capital throughout the Expenses year, our FX CIBC net billion of the up expenses revenue were lower full up XX which to contribute Corporate the the of to significant loss was strong, our rate than and volume higher the treasury, increased sequentially, prior Revenue liquidity

maintain quarterly segment, but $XXX $XX of of be to XX end this year Going expect million the in loss forward, highlights range our million full we short-term. our results. for that to Slide guidance on higher the financial

As X% line notwithstanding our strategy. a earnings we challenging generally revenue and bank. to in market of our Operating our and were result medium-term with results this demonstrate the our reposition X% of ‘XX for a our and the single-digit negative late Victor leverage his year were high Revenue deterioration fiscal mentioned in with pre-provision of X% growth pretax in progress quarter, year opening in line and growth took fourth remarks, guidance executing was our guidance year below our our target proactive measures the and targets. as in both

Our the environment. as intention current this a at market quarter target our ROE operating of in communicated the in despite generally XX.X%, a fourth positive with through than XXXX. Investor generate result Day line and results is year’s to ratio pressures in Adjusted aggregate CETX and offset higher uncertain was leverage our

continue make XX, our capital strategy financial against to entered given credit mix, and confident position. Slide a we our culture that progress resilient business conservative fiscal to client-focused deliver we Turning will strong performance and have diverse XXXX

outlook economic earnings I base to financial reposition to we is to through fiscal positive XXXX, continued annual be outlined will and namely X% leverage, Day with improving in anticipate to operating our through gains, the ROE anticipate In as challenging and ending in turn growth XXXX. XXXX, and of uncertain Frank. recognize, our consistent a targets now plans revenue report, our but XX% an results continue that expense environment in XX% Investor to We growth share CAGR plus. moderating we result, and the by his however, of generate more measures the Assuming operating as aggregate, our leverage for we’ve taken to proactive over Victor mid-single-digit remarks. call likely business

Frank Guse

deteriorating everyone. year our was of morning the levels, allowance year, good XXXX in in and macroeconomic Hratch of dynamic we Fiscal environment. the Starting increasing a reflecting you, environment. began QX Thank terms the

details performance XX throughout credit remained Slide provision credit our for strong year. the losses. However, our

our loans reflective experienced In was increase total were We this quarter. pre-COVID $XXX as retail, towards U.S. loans, in attributable The with an loans Our forward-looking deterioration in in in provisions $XXX QX, impaired indicators. few loans reflecting was higher million levels. provision were last $XXX of commercial mainly and our a expected, government loss impaired and In credit Commercial provisions The mainly capital provision provisions and QX with business million quarter, reversals million in for delinquencies driven higher on in increases impaired and government quarter. impaired million returning and high compared largely provision performing business lower minor this retail coupled by both allowance was lower higher to CIBC portfolio, to $XXX Canadian FirstCaribbean on in reversals markets. due QX.

due as to performing our with change in I Turning performing it still prudent our our X in our XX, higher forward-looking unfavorable saw previous basis indicators We points as strong focuses mentioned, increase to mix. backdrop. are portfolio Slide to credit just basis we Consistent by quarters, points, the quality. impaired allowance lending mainly this Slide the allowances in well given XX which incurred portfolio as overall. quarter, economic the increase on remain reflects driven our provisions well XX

$XXX were balances of loan total which lending. secured billion, is real XX% Our estate

The is portfolio but now a details XX our quarter-over-quarter, to at to up XX%, line average remained portfolio in Overall, new quality performance. and business which has an Slide perform mortgage our balances our formations ago uninsured gross rating impaired in with Despite year seen were impaired of loans. XX% business and have well. from retail mortgage mortgage The continues and a in and and our the house both is loans. gross BBB, for average we QX increase the credit certain equivalent strong an has expectations. with which increase government government variable in gross increase for little of QX steady down in loan-to-value dollar XX% historical over The and price low the a portfolio as from Our remained risk show formations both rate and a up regions. one-third Canadian rate. accounts stable loan portfolio and index delinquency XX-day portion was the write-off from run and details gross impaired remain perspective, our a and of consumer ratio pre-pandemic rates new XX than Slide portfolios. our net lower impaired plus drop

QX, both net in write-offs to revert spending towards with activity As higher patterns. delinquencies and continuing client pre-pandemic expected, trended

Canadian expect increase we As from personal XX our the real lending expectations. overview portfolio. fiscal delinquencies years lows in noted has and to prior and continue experienced of Slide estate an an been secured in well in previous quarters, provides within retail write-offs are those

last segment We to with origination the this and relationships. principally where with our of balanced years of mortgages growth mortgages. have we clients deep The have efforts are owner-occupied, balance the XX% continue have over majority focus us. where been mortgage being clients in with X those investor our relationships

Toronto with Vancouver delinquency late-stage average. the and outperforming continue Canadian low portfolios rates and stable, Our our portfolios across remain these to

On our and At evolve. be as being very with $XX we less months. only small, billion ratios continue stable see included will of the of will our our renewing that and variable higher approach in portfolio credit prudent to a a we XX%. fixed are $X mortgage at details and are markets still quarter-over-quarter. These a Slide LTVs as time, rate portfolio than have out billion clients high shows closely of reach financial portfolios up mortgages that and We contractually The monitor and XX, rise and mortgage perspective detail see positioned, mortgage we proactively the our balances who of million actively is of in mortgage XX% we rate excess renewal. and material come and stress. do distribution of an expect are mortgage than this are portion Over LTV LTV $XX from XX% period, of We of see in XX%. uninsured our clients the over risk U.S. whose for has of quarter score U.S. Canadian residential well Canada XXX less losses. Slide On portfolio exposures or XX, at of to portfolio estate our risk and grade provide takeaway our investment portfolio. our both uninsured we Slide commercial in and less key is Overall, end. FICO of interest at portfolio XX both the not score on XX Canadian next to our we real are X% take monitoring rates

strong track through and a remaining on well-capitalized We with standards strategic record in have prudent with U.S. managing experience lending for our exposures CRE economic sponsors both Canada cycles. the and focus

remain to in is this closing, continue Our diversified performance In perform exposures well well expectations and in well. regions line with quarter. both our our

And positive back call work more I’ll as at and to who as the to proactively that to continue performing solutions expected, we are our are provide economic outcomes. turn drive ultimately coverage. portfolios we conditions credit evolve, Our the clients with have risk operator. now strong

Operator

first is go Thank Please you. Ebrahim [Operator Bank Instructions] Our from of ahead. question from Poonawala America.

Ebrahim Poonawala

lower? ‘XX. guess, growth? expense single-digit following and you growth mid-single-digit uncertainty think just expectation mentioned go Just we for the a to into the number, how us mid-single-digit or I you’re revenue the talk can your that and high Thanks. revenue tie growth growth When revenue macro, up, look but expense Good I does around the if that expense revenue thinking appreciate at about mid-single-digit the morning. environment growth growth I actually, worse, is mid-single-digit

Hratch Panossian

you question, uncertainty to Ebrahim, the Thank my remarks, said XXXX. for Thank there with Yes. I in respect as is you.

year’s to through of said and as and single that across to In to fact from strong is we ROE. but the our specifically, guidance, leverage specific the We very confident environment. uncertainty Investor deliver X% in that all high and our segments. our provide terms our the there are is mid-single in I growth, revenue line more clients that my is to this that and growth single-digit expect of feel that high will targets, that continue didn’t continue positive we of remarks, ‘XX What operating we level. is will we digits, because results ‘XX is mid- moderate our long-term confident of with strategy Day we growth digits the bottom guidance

continue We share. gain to will

expenses tailwinds, revenue around in will We digits. year-over-year interest revenues depends on. as full is very stabilize And move around of uncertainty. that and there the can side year that. expense a continue lots from is quarter’s which have markets on rates and fee mid-single result we around, will to benefits focused we’re that from this The derived something levels, of

continue target. to positive which to manage take between to a I So point forecast get a is to at little us we operating deliver on have or over deliver time, wouldn’t the more, quarter, guide more uncertain, to digits to leverage do little as and this If it, that less, business reposition rely targets always and actions to mid-single can or you our done our this try Ebrahim. continue things to

Ebrahim Poonawala

But leverage views any you strong in on operating ‘XX. have

Hratch Panossian

didn’t… Sorry. I

Ebrahim Poonawala

operating any positive leverage asking hitting just was ‘XX. strong I around in views

Hratch Panossian

Yes.

define operating I extra years. maybe more will targets. our you few have by are may aggregate step the to our what yet, period a taken medium-term annual report, confident or we positive said, specifically deliver mean the in not an As noticed we we over leverage of We’ve

period. through we the so a X look X-year them over cycle at do And to

feel we so confident that. very And about

leverage In terms than looking remarks, as in we’re of my for better year. I said operating XXXX, this

as that. operating confident would that any do and always, leverage. is year, for in can leverage We’re that given we improving operating over positive time, we prefer And looking we’re

more we side we expense But side, expense challenging know we make leverage know can control to. of short However, pull the we could positive we on can time. revenue operating in period side we have levers the any needed the if

Ebrahim Poonawala

Okay, thank you.

Operator

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

Meny Grauman

terms in missed Apologies your could for but specifically. if hoping Yes. was Hi, commercial loan morning. growth good mortgage in an get we update XXXX this, I and of I views

Laura Dottori-Attanasio

Meny, morning, Good Laura. it’s

team delivered out, to I our made good outlook and see, off look over our say, that a because growth also highlight I’ll our start down. over really the if for housing to I we’ve in in economic is to strides and maybe for I’d CIBC and that When our years, the we’ve and involved Jon then XXXX. mortgage I really So looking single-digit members clients. franchising of it point at to out even pipeline, commercial hand side. we our low mortgages like want to I may, application would will growth. shout Expect at consistent

us. October, client of So as have now XX% our have deeper relationships base that with mortgages at

think So commercial. volume to franchising XXXX I that while continue side will the that mortgage to and the of we Jon the And see come in side decrease we to really bank the well on in of expect of of grow offset levels, the over for to are to do going we other off do maybe areas see some business.

Jon Hountalas

Laura. you, Thank

the for loan industry year ‘XX a was growth. in robust terms of So commercial

the our single, levels, double rate at Shawn, macro go over the is be to XX look when industry low double-digit I the range, will to industry XX, the client me to to this end entrepreneur about feeling at we Historically, the years, confidence, is mix, high high year, When continue back that. it in that going growth at in to kind hopefully, X% single, most of were is environment, think the I low pass let did outgrowing. XX%. the high historical and of you. look XX% I to

Shawn Beber

Thanks, growth ‘XX, been we’ve about strategic the investments the we Really Canadian investments, the fiscal Jon Jon. in what Thanks strong talked It’s making. Good of mornign, commercial the business. similar for quickly, a function quesiton. for Meny. to had

loan ‘XX that for and to expect growth moderate single-digits in high for expect We U.S. segment. growth in the

Meny Grauman

CIBC? these rate deposits Thanks a for CIBC? at of to going pretty are related big that. higher-yielding And to to at question then of management wealth much assume just is ask presume retained places. wanted staying is how So deposits, that that’s decline. The that being quarter-over-quarter on environment. I But I I much Canadian the how is

Jon Hountalas

you in that the of the entire the bank. Jon. The to for moved amount the It’s Thank over wealth quesiton. rest dropped business

Meny Grauman

you. Thank

Operator

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

Gabriel Dechaine

Good morning.

because industry at lower line impact term a the of that’s as into was there. margins far growth fast the you Client growing margins typically disproportionately to see to period dive since period your the XXXX. today book renewal the ago, I recall as that... that mortgage of today acquisition we that wanted X to that Victor’s correctly. mortgage if comments believe it that period dot has so high And average, the I in was Xx the grew when mortgages So to want because of one years I best I exposed influence that such CIBC was to a from on

Victor Dodig

couple So on Gabriel, a then going XX% Canadian our me off the This of to of things, in the was grew acquisition Laura. it year year a client our for We by banking hand and personal franchise Costco over just growth to portfolio. with base significant retail comment of let Canada.

the in affluent our personal level bank. Xx place segment that on that with affluent being book financial We’ve mortgages franchised. that emerging of X,XXX are in that the growing are is over put increasingly We’re share at our of dealing focusing advisers our market

that’s with elaborate you that that, Laura, aligned growth segment. strategy, can high maybe that. touch, high our with with all on along all So

Laura Dottori-Attanasio

Sure. Thanks, And the Victor. for question, Gabriel. thanks

we’ve not across just in have grown out, mortgages, we pointed Victor As our but of we products. actually grown have all

business banking. in fact, of while the for been deposit the a our everyday side product In leading has

once really we And year so this worth that’s an retention sign. incredibly actually and client franchising. like a pointing again acquisition, year had all it’s on strong out And of positive

growth, growth, at were when I as we at X.X%. client said, so client we net look And

told peer average X.X%. We’re only our was at

rates best well. XX%. did we had So retention really our ever we above so And

really again, delivered but products, have all when we some mortgages a does So affect been on our part reality are We’ve not of growing. base, of point speaks And a overall to great a done on the your well go to just our of how our asset the it our across is compression going book. think large through job NIM front, mortgages results. there, margins, market-leading growth. But we because is But we’ve is, franchising I on part experience I doing well. mean, quite large Franchising front. that client the

mortgages we that have seen rates. shown raising you Now, multiple and sure leadership, when it am have in client occasions comes I to on

did did we our up that give So, margins to and we growth. some protect near-term market share

and pace remain relationships. had, would mortgage just this you However, the inflow more saw our with at competition, notwithstanding have to before. we future. bigger than in again, a and benefited we rate come have our And started. will, you, into also we really we selective November, margins, as impact, Last client margins we fell. it probably we inflow give In we activity slowing this outweighed can as our the October. big you many, And that But that like ever far lowest our far, pressure experienced, you we quarter, this from in market. of with And had we was expect drop this rate would the And seen tell saw, our under interest focused environment. comfort, quarter, activity you were prepayment if increases. tell intense in rising deeper low. when look if I that, have prepayment client some the say, I how had rapidly I market That, along quarter we a rate but market We on the in increases really

So, this volatility did November we we of commitment lows. saw when than look we are mortgage into sort quarter. as as we next see quarter And much seeing pipeline, October our much we higher spreads our in shouldn’t

our expansion to as are improve will, across earlier, I products. just and it’s our doing that to do growing have I continue system the of that those to the we rapid to would margin question, XXXX. and are of I we the margin bank, the to pressure hope see to said its think in given some in in in our work answers you increase got quarter gradually we in expect expect again, of deposits, well first products second through Gabriel. digest see margins But and have the all So, quarter thereafter. really into cost continued And we we going funding, the way, I are if

Gabriel Dechaine

does of the It But day. a good on. interest time, have go in

Operator

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

Mario Mendonca

first together. perhaps, will Hratch, the take least rising each the do through? might will a look relative in is you better think year bank guys peers. are but the am from the Hratch, suggesting I other. at and you Can with was a at trouble it the that you about to me sure rates, because to of benefit it that look bank the near-term. from the year, the a consistent retail global margins continue is second talked But having help sound half my second a morning. what little doesn’t in Good what think you I of suspicion Canada how like half, margin in little Could about perspective would piecing to half bit relative

Hratch Panossian

And Yes. say right. that. Good would general, you to are in Happy I do Mario. morning

some has trajectory about a factors of noise the pace will we interest will rates margin as given better see been of spoke Laura because think the There bit I of increases. stabilize, stabilize.

start in Canada of re-prices how our Bank have then example, and terms got pace extent, sheet. rates saying, of rates, and sheet. the balance For look, through But by we a balance always Fed that I strong

generating growing strong number have level the past. got this, the and sides bank impact in that sheet and of a is loans have about total balance that on of we overall that on We at trajectory. the contributing and talked businesses There sides, are both to factors both deposits, margins NIM

there is changes. mix So,

quarter mix this happened what total at NIM, look changes you bank to factor. a were If

more saw liquidity. You

go saw XXX%. LCR You our up to

seen have would our cash a at Bank resources, You Canada. of it of lot sitting

increase. balance that our sheet seen You would have on

will that of to will bank come to well. margin. core the in, And So, go some total there those will interest P&C rates affect benefiting I your help normalize. now will things as Canadian see of benefits overall Those answer margin. question, we then trend costs If from

few so same And you benefit basis points continue the a will a to quarter. see

with very been have this. consistent We

basis basis few a a benefit if points ongoing spot in over on will you said interest puts to a points has of basis, guidance XX% XX% basis. will, quarters, over a – rates, quarter basis points to territory on an XX which the we you four XX from Our year,

good short-term, in that. expect Laura that covered are of that the we negative prepayments a feel going So, were impacting now. don’t still about right, it impact pretty factors We forward. The to business that margins that

But when be the commitment later. year. know, expect pressure your bit I are So, go book spoke hit the you half as starting delayed, a I are factor little a spreads little of piece the a will first margin But The to months sequentially few think up. those for about mortgage don’t to Laura while put and longer. in a

some through, I so think in And will the as the funds than passes that the better stabilizes half of back you around first half. increases cost and noise see a trajectory of other the

Mario Mendonca

Okay.

what lion’s product? got that myself, to maybe helpful more peers but for moving region there check the or reporting. the topic, to that a I a clearly, out not can [ph] reserve specifically product what stands So, share your loan out are of performing more is different specifically and What loan reserve, increase than what because would regions CWC performing little be understand of

Victor Dodig

Yes. thank for and question. the you Good Mario morning

and quality, in look is overall really the in see delinquencies build performing said, are where that build, performing allowances that’s the as well, And we So, despite positive, asking early PBB very, the underlying credit allowance U.S. wealth, at built. is, as impairments, our driving and are delinquency, I remain we well. performance very What’s when commercial would you regions, and say what performing if that we indicators. being forward-looking strong you about in

So, an books to really the Canadian particular, book, U.S., down. mostly card lending so – our that U.S. then in credit question impacting impacting Canada. it’s And coming our DSR personal commercial the And books on books is of in is our in then U.S. that is impact outlook our down. U.S. your the that coming course, having and GDP And is in GDP,

Mario Mendonca

Yes. Okay.

Please ahead. go Sorry.

Victor Dodig

be have adjustments comfortable those as we continue had to But levels. saw as small with but and additionally model well. we I smaller, impact Yes, very said, loans regular a overall, our

Mario Mendonca

is personal cards, Canada mortgages you in are as referring right? well, and say So, lending, that when to you

Victor Dodig

No. When the in There unsecured I personal books. personal limited space. lending, is lending say it’s mostly our mortgage very

Mario Mendonca

Thank helpful. That was Got it. you.

Victor Dodig

you. Thank

Operator

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

Sohrab Movahedi

Thanks.

first, or for be your just this expense – stickler reported talk mid-single adjusted expenses to year, is sorry digit a on about next off expenses? growth When Hratch, this. Just we it

Hratch Panossian

Good morning It would adjusted. be Sohrab.

Sohrab Movahedi

Okay.

really, so And maybe the bigger question Victor.

lots the out you I a think messy increased it’s of and mentioned to earnings stuff repositioning it have the a Can dividend. what times, and the of see you fourth power of kind just quarter. There is you is zoom remind couple please? quarter, of that not in don’t have the I know uncommon us you bank,

Victor Dodig

Sure, Sohrab. question. Thank you for your

I I of the that at earnings the bank. the bank. back reflects year, So, the power of this the power earnings doesn’t If really quarter full reflect look think

peers course year. the led growth revenue of Our over the

Our pre-provision our that We distinctive about We base year. continuing our is agenda. fiscal a we peers retail large portfolio. XX%. into credit investment XXXX the What over course invested by the with card strategy grew earnings client was our of went growth led in

in commercial capital in markets banking, We the in share continue to U.S. market grow

We to comes banking. on it when focus management client wealth affluent continue personal segment, the to and

those are levels. all well. So, public we are those to at indicators, working If continue a see really, really are of we we as which markers we key private company. company, invest a But

to operating shareholders. have We We economy the need to is leverage our deliver shifting. constructive recognized

to remarks, going now our head are compensation of want this made. where And is on at not investments. significant those And we We in as be and are competitive said It’s to benefit investments. pivoting. of we CIBC. made about earnings get reflect will we that that don’t the we my a I feel power XXXX. we have a a have made quarter. are good the into that you team scale have market. feel We a as we behind, point strategic very have see pivot quarter our investments We investments This own left we bit full and leverage does So,

Sohrab Movahedi

you. Thank Okay.

Operator

RBC Mihelic Markets. Capital

your Mr. line open. Mihelic, is So,

You with question. may your proceed

Darko Mihelic

liquidity with morning the Good to net more seeing. sort in just can apologize. may quarter have I your short-term, the wanted what a key view on perhaps margin Mario’s forgetting be for if sort back Can what you of was in and Looks cost? this does I high forward? getting a moment, uncertain a the the that bit what CIBC ask question quarter everyone. a segmented are Hi. a in you thought mean in Does describe you to liquidity factor that me that liquidity build going respect further And sort that to to increased environment? going just portfolio. in in the continue like deciding I to drag? increased and very going and in of quarter. we of And little the we this for interest behind sorry, is the this this building expect deposits lot process I to at just And took forward mean of you should

Hratch Panossian

your Yes. right, say Thank was the it, would success deposits. build quarter you due to that for this our liquidity keyed on predominantly you I Look, question, Darko. on and

– end, our sides know, of cost be on the spreads focused needs, of deposits go when of We to credit you cost so longer sheet, serving funding XXX both the is And continue balance deposits balance as costs particularly of in on clients’ on on preferable of growth. points you funding to basis banks, half seen have on the or up the shorter markets, about that. wholesale wholesale end,

is And that have, than are so today to or indeterminate benefit the maturity wholesale and it they on is. funding the whether incremental larger deposits term margins deposits cost funding,

have we growth. so deposit And been focused on

built side for success. It just bit been to that time. We deploy us a that deposit that on up clients excess And some over time have takes it. serving of good little had liquidity, and gets deployed and

in short-term, not excess so liquidity. liquidity. to the anticipate us And it would I build continuing excess becomes

to grow you those focus and to deploying seen on Our strategy grow right. deposits is our over support And our time, that, to clients, margins. have

this NII are on. You we that’s what And bank total year-over-year level, year. focused have seen the up at our XX%

as keep have those loans Deposits will there keep between will as we a I coming, mismatch said, of overall, things. Margins NII. growing continue will positive timing we go will have is two coming, forward. trajectory little a and We bit sometimes

will wouldn’t benefits So, quarter extrapolate we And deposit on of that rates. to past one. front, I continue this on see the

mentioned of made of the our see bearing a to it deposits. benefits rising would non-interest don’t in my we I less or margin has base part deposit our where As on client is those and quarter the – I pass are we rates rates a based has remarks, of deposit yet deposits. low-cost, than that now, large on say expansion into would

And rising by support to lending from to interest deploy that go deposits side. is the raising lot to on benefit a clients so and to there continuing rates, more

Darko Mihelic

And it’s what kind and segment But – to referencing? the can us? – deposits your that And growth those? those deposit out markets are are see $XX billion be business. of clear, I in billion by Hratch, $XXX versus deposits you the big that last are is capital so up versus it’s for high-quality you So, maybe flesh just quarter maybe

Hratch Panossian

certainly. Yes,

across one it here, say, a turn covers will remember So, second I areas. of number different segment the of in I a will things and that that Harry to

that as across our got bank We There structured in segment got that those deposits. have corporate cut DFS we in have business deposits well. are that the

also and FX. We with is board, have deposits got across clients there the

So, I there more will and Harry, But that. do to Canadian deposits component, dollar-denominated, and impact mind of specifics. can it that have FX the pass in to are not we speak can that keep in on he some

Harry Culham

sheet Thanks focused, the we I on medium-term been discussions important growth mentioned. as which just the And Hratch our our product say of know, you we balance are Hratch has areas And last on very Day are over the the Investor have based U.S., to deposit our focused around and would across course. gone of that driving good so well. morning. very our Both sides in growth business,

last years, actually the of have know. as the We will that you size over doubled X business

the in dealing are is delivering These are U.S. all we that are and both are to so showing we balance with, a of and are And CIBC need CIBC, those clients sheet core we the clients, this clients. sides all for focused we on our of

as So, that going the driving side we are liability area asset focus continue and well really side. as the funding to in to

Victor Dodig

space. are strategically, specific just Darko, of know querying you kind I on this

in from very shifted and a We as term for and offering notable. clients competitive they look deposits that own markets at sensitive space, deposit leaned-in to the if have our that mindset growth approach equity been – non-interest it’s their delta took us to actually rates deposits you

as going serve well to client It’s having a us of think get Promoter in better Scores, And are more a our clients we driven terms and out I that’s clients benign experience. those come into frankly, this of franchise better environment. winning. quite Net

now Our made way forward. a to make going shareholders job in that is clients balanced sure and our our it very

Darko Mihelic

color. Thanks Victor. I appreciate the

Victor Dodig

you. Thank

Operator

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

Scott Chan

or it or flat seasonality the certain in kind of because margins, the to the basis about in – on for strategic line, line do how in about of in everyone. stuff there on Like billion those parts your your and flow Hratch, on in for will through straight a keeping fiscal is half the target talked of you like – think conversations some expense with $X.X about and have Good of I in is digit mid-single first morning you expenses second know QX. year? a terms sense a the XXXX, us business the half quarters

Hratch Panossian

in guidance expenses, I we reminding back is and Scott. you the all our are consistent. will Thank There everybody, line the right, business, variability Thank terms year never our complete It’s time-to-time. where you. had for a right. is But go to we of quest in straight maybe

about growth another be so inflation. inflation That it in away. do of of much and the where because expense core BAU, in go Our can was. terms expect range digit was to low-single that’s We

so around with that which X%. much spend, our the stabilizing. we higher had year-over-year a investments then And we are those of it the inflation, other And is but was so were roughly strategic

continue our But increase to strategy, And on there continue investment the to so anymore. we no in we invest. of execute level is

starts we that taken So, a essentially that seen the that to digit actions increase course. rest Inflation structural of offset And level have would of in investment stabilizes. you the can the have low-single backtrack. normal

the can in any us but going some generally be confidence to gives And can stable the pluses so quarter. go And say there and we math, from right. here, is to minuses that you do

at XXXX that If will quarter, you through what we you minus that. are that magnitude, look is, digits, just because the in of ‘XX in can and that and confident and take take something in plus into deliver our give we that you or a you any mid-single X.XX growth result expenses, that’s

Scott Chan

Thanks Okay. a lot.

Operator

for the I to we Victor. the turn meeting you. would over That’s Thank all questions. now have time like to

Victor Dodig

operator. you, Thank

like all still the we plan So, you are that know next queue, because week the are all calls I days, in backlogged. ask to other you that we two I there you you over I you that available just anything those to that give questions us, let on myself a of happening, deliver want to you answer will in to may want confidence to have apologize and have, XXXX. know are are who day, to and including would we next for any

end and of support globally Board I before the on thank team of So, the the Executive we and wanted CIBC our clients. call Committee, your of behalf members to all our continued for

win I Belgium. for Freudian they slip CIBC growth because XX o’clock face for does Croatia Your and purpose-driven client was little I experience, clear in helped our confidence have And have seeing headwinds built client-first New a a focus all business relationship-oriented I strategy. and team to there who Canada today globally a leadership beats of that’s those team I in client as we Morocco. care, have lines. in Anyway, in when who Year, members critical be are we our world. That for our hope hope for of momentum what establish bank the enter terms And the acquisition. may confidence at retention, our Canada I bank, is modern while you of a across confidence you success client component together, of

building We bank. that are

strategy confident have. in we are that We the

going are to compete. We

win franchise. going are every each our day grow business to for We and to

expense and also festive – to look to of engaging New course wish We that you of are and are are you we adjusting the mindful Year. in of very a our we investment and all that the with want XXXX. rate you. growth environment over of economic expense in, and Thank mid-single I yours season level digit holiday the forward to

Operator

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

Canadian Imperial Bank of Commerce (CM) 1 Dec 222022 Q4 Earnings call transcript