Canadian Imperial Bank of Commerce

All participants, please stand by. Your conference is ready to begin. Good morning. 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 Jeff Weiss, Senior Vice President, Investor Relations. Please go ahead, Jeff.

Thank you and good morning. We will begin this morning's presentation with opening remarks from Victor Dodig, our President and Chief Executive Officer. Following Victor, Paraj Panosian, our Chief Financial Officer, will review our operating results. Laura Dottore Atanasio, our Chief Risk Officer, will close out the prepared remarks with the risk management update. We're also joined in the room by CIBC's business leaders, including Mike Capititi, Harry Cullum, John Hantalis, and Christina Kramer. They will be available to take questions following the prepared remarks. As noted on slide two of our investor presentation, our comments may include forward-looking statements which which involve assumptions and have inherent risks and uncertainties. Actual results may differ materially. With that, I will now turn the meeting over to Victor.

Thank you, Geoff, and good morning, everyone. Our bank reported strong first quarter results this morning, with earnings of $1.5 billion on an adjusted basis, which is up 9% over last year, and a return on equity of 16.1%. We're pleased with the performance across all our businesses, with particularly strong results in capital markets as well as consistently solid deposit growth across our bank. While geopolitical issues and more recently the corona outbreak are creating a more uncertain environment globally, overall GDP growth in North America has been relatively supportive to date. As expected, our credit portfolio remains strong and is well positioned in a stable environment. Our CET1 ratio of 11.3% provides us with the flexibility to invest in our core businesses for the long term, as well as return capital to our shareholders. During the quarter, we accelerated the pace of our share buybacks, repurchasing 1.5 million shares. I'm also pleased to announce an increase to our quarterly dividend of $0.02 to $1.46 per share. While our efficiency ratio has improved to 55% this quarter, we continue to challenge ourselves to be a more modern bank by reinforcing a continuous improvement mindset and prudently managing our costs. I'm going to circle back to how we're going to repurpose our cost base later in my remarks. Turning to our business segments, in personal and small business banking, recent investments in our client-focused solutions and our emphasis on advice are paying off, with improved growth on both sides of the balance sheet. To further support our mortgage and small business growth, We recently announced a partnership with REMAX Integra offices in Ontario and the Atlantic region. This partnership provides our mortgage and financial advisors a different avenue to build new client relationships. Our commercial banking and wealth management businesses, both north and south of the border, added relationship managers in areas that we have identified and targeted for growth. Commercial banking continued to demonstrate double-digit loan and deposit growth. Our wealth management businesses also perform well, largely driven by higher fee-based assets and strong net fund flows in both Canada and the United States. Our capital markets business had a very good quarter, with earnings of $335 million, which is up 63% over last year. We have a differentiated capital markets platform, with an increasing proportion of earnings coming from stable, recurring revenue streams, such as our innovative foreign exchange and payment solutions. We also continue to diversify and transform our earnings by growing in the United States and bringing capital markets products to our clients across the rest of our bank. These results across our bank reflect the strength of our client-focused franchise. As we look to the future and focus on the execution of our growth priorities, this morning we announced some leadership changes in support of our growth goals. These changes leverage the strength and capabilities of our deep and experienced team and position us to accelerate the ongoing renewal of CIBC. First, with Kevin Patterson retiring in May of this year, I wanted to acknowledge his strong leadership and over 35 years of service at our bank, which started as a branch in Hamilton many, many decades ago. Thanks to his steady hand, our technology and operations are well positioned for the future. Kevin has been instrumental in building our best-in-class mobile banking platform, which is a legacy that Christina Kramer has also helped shepherd to what it is today. As Christina steps in to lead our technology, infrastructure, and innovation group, she brings a deep understanding of our clients and their changing needs at a time when technology underpins our current and future banking relationships. Christina also has extensive experience with our processes, our people, and our platforms, which will be key as we continue to focus on our clients' experience with our bank. as well as simplify and profitably grow our franchise. Laura DeTore Atanasio, who many of you on the call know well, will take on the leadership of personal and small business banking. Laura joined our bank in 2009 as the head of corporate banking, responsible for all credit activities in capital markets globally, and has also held other senior leadership roles in financial services. Laura is a strategic and passionate leader who brings a disciplined approach, which will be important as we continue to modernize our retail banking platform. Sean Bieber will become our Chief Risk Officer. Sean joined CIBC in 2002 and has led our U.S. capital markets business, as well as our bank's legal, strategy, and corporate development functions. This includes playing a central role in our acquisition of the private bank. Sean has knowledge not only of our cross-border business, but also of the regulatory environment that we operate in. Coupled with his experience on governance matters, He's well-positioned to take on the leadership of our risk team as we continue to prudently manage our bank. Harry Collum will continue to lead our capital markets franchise and will add accountability for oversight of First Caribbean, as well as our direct-to-consumer businesses, which include Simply Financial, Direct Investing and Advice, and our Alternate Solutions Group. Under Harry's leadership, our capital markets business is highly connected to our broader team and has proven its ability to deliver value to clients across our bank. Through their leadership and that of our broader executive committee, we will continue to execute against our growth strategy. Specifically, we will continue to cultivate an engaged culture focused on delivering the best service to our clients, to optimize our cost base, and smartly reinvest our capital to deliver value to our shareholders, clients, employees, and the communities we operate in. 2020 is an important year for our bank on each of these fronts, so I wanted to provide a little more detail. At CIBC, we have invested a significant effort in building a purpose-driven bank with a client-focused culture. Our purpose is to help make our clients' ambitions a reality each and every day. We've made steady progress in embedding it into the fabric of not just what we do, but also how we do it across our bank. Our unrelenting focus on our clients' is evidenced by our clients' experience results that we're all proud of. This quarter, we achieved our highest ever Ipsos Net Promoter score in Canadian banking. This builds on the very strong J.D. Power results we delivered last year in both Canadian banking and brokerage, as well as our leading client experience results in the United States. When it comes to costs, we also need to continue to challenge ourselves to be a more modern bank by focusing on continuous improvement and keeping a careful eye on our resources. Our current 55% NICS ratio is down 5% from 2015, which was achieved through repurposing resources, realigning our organization, and simplifying our processes. While we've made steady progress in starting this journey, we have more work to do. This also includes reviewing our organizational structure, maximizing our capabilities, and streamlining decision-making, all to further enable execution of our growth strategies. At the same time, we're committed to reskilling and upskilling our talent to ensure our employees have the opportunity to develop and grow as digitization becomes a greater enabler of our banking business. To that end, the restructuring charge we announced this morning supports an enterprise-wide program to accelerate delivery of our priorities, including improving our efficiency. We're not taking these decisions lightly, but the restructuring will help us repurpose our cost structure as we simplify reinvest in, and position our bank to further strengthen our relationships with our clients. Turning to capital, while we maintain a strong capital position and balance sheet discipline, we continue to thoughtfully and strategically enhance returns through effective deployment. This is an area where we've been making solid and steady progress as we diversify our bank. A clear example of this is our U.S. business, which represented 6% of our earnings in 2015. Through organic growth, as well as strategic acquisitions. It represents 20% of earnings today. We remain comfortable with our capital position and will continue to return capital to shareholders and remain primarily focused on organic growth. So to wrap up, I'm pleased with our performance this quarter. We had solid results from our core businesses and we're seeing good progress in some areas that underperformed in 2019. Our performance also demonstrates the strength of our client-focused strategy, and the value of diversification across client segments, industry sectors, and geography. And with that, I'd like to turn the call over to Haraj to review our financial performance.