Canadian Imperial Bank of Commerce

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 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 CEO, followed by Hiraj Panosian, our Chief Financial Officer, and Sean Bieber, our Chief Risk Officer. Also on the call today are a number of our group heads, including Mike Capitides, U.S. Commercial Banking and Wealth Management, Harry Cullum, Capital Markets, Laura Dottore Atanasio, Canadian Personal and Business Banking, and John Hantalas from our Canadian Commercial Banking and Wealth Management. They're all available to take questions following the prepared remarks. During the Q&A, with a hard stop at 8.30, we ask that you limit your questions to one. As noted on slide two of our investor presentations, our comments may contain forward-looking statements 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, Jeff, and good morning, everyone. I'd like to open the call with a few comments on the macroeconomic environment, followed by a summary of our second quarter results. So there's no doubt we're all in a very fluid environment. First and foremost, our thoughts are with those who have been affected by the war in Ukraine. Beyond its human impact, the conflict has exacerbated COVID-related supply chain disruptions and contributed to inflationary pressures around the globe. Central banks around the globe are responding by raising interest rates to cool inflationary pressures, which is leading concerns to an economic slowdown. Now, during times like this, our unrelenting support for our clients together with our diversified business model, our strong balance sheet, and our prudent risk will drive consistent and sustainable performance for CIBC. You can see this resilience in our financial performance. Against this macroeconomic backdrop, we reported solid results this quarter, underpinned by our strategic focus on investing for profitable and enduring growth. Revenue was up 9% over last year, driven by broad-based loan and deposit growth, higher fee income, and strong client-based trading activity. Adjusted earnings of $1.7 billion, or $1.77 per share, were down modestly from the prior year as we were starting to see a normalization in provisions for credit losses. We also reported an adjusted ROE of 15.2% and a CET1 ratio of 11.7%, well above the 10.5% minimum requirement. Having delivered solid financial performance on behalf of our shareholders in the first half of the year. Today, we also announced the two and a half cent increase to our common share dividend to 83 cents per share, while maintaining our payout ratio target of between 40 and 50%. Note that the dividend also reflects the previously announced two for one stock split that took effect earlier this month. So turning to our business results, our Canadian consumer businesses demonstrated continued strength during the quarter. with growth on both sides of the balance sheet. Excluding contributions from our Costco MasterCard acquisition, card purchase volumes were up 22% from a year ago, most notably in discretionary spending, such as on hotel, entertainment, and restaurant expenses, as well as for transportation services as the economic reopening took hold. During the second quarter, we also completed our acquisition of the Costco credit card portfolio in Canada, adding one-third to our total purchase volumes. We're very pleased to welcome more than 2 million new clients to CIBC. Early performance of the portfolio has been positive. New account acquisition, purchase volumes, and balance growth are all tracking ahead of expectations. We have initiatives in place to deepen relationships with our newly onboarded clients and look forward to reporting on our progress to you in the quarters ahead. We also continue to build relationships with our existing CIBC clients by making investments for the future. Post quarter end, we launched CIBC Smart Start, a no fee banking and no fee self-directed trading solution to help Canadians up to the age of 25 get a head start on their financial journey. Better said, if you're under 25, you bank for free and you trade for free at our bank. We're the first among the major Canadian banks to offer this and we believe it will further our momentum in new client acquisition. This program simplifies our existing offerings for youth and students, but providing a market leading solution to this cohort. Over the last 12 months, we've seen a 32% growth in our student population, and the new offering will further support this segment. In North American commercial banking and wealth management, loan demand increased on both sides of the border, fueled by our existing client base to support their increased working capital requirements, and from new client relationships. In wealth management, volatile markets driven by geopolitical concerns dampened asset growth to single digits in Canada, with a slight decline in the US. And this compares to double digit growth in both regions last quarter. Now, in spite of this market volatility, we continue to deliver solid net flows across our wealth businesses in both regions. In capital markets, our focus on supporting clients through volatile markets generated strong trading revenue. As well, our direct financial services business continued to benefit from volume growth in both Simply Financial and our currency conversion business, associated with our international student pay and international student banking offers. Overall, each of our businesses contributed to solid results. Now, we're proud to be recognized this quarter by Media Corp Canada, who named CIBC as one of Canada's best diversity employers for the 12th consecutive year, and by Equileap, who ranked CIBC the number one gender equality employer in Canada for the second consecutive year. At CIBC, culture matters. Providing an inclusive environment to attract and retain talent with differing ideas and insights is a cornerstone of our bank's culture. By having a team that reflects our clients and communities, we can better deliver on our purpose of making our clients' ambitions a reality. Now, looking ahead, we're well positioned to continue to deliver for our shareholders. In an environment that's increasingly fluid, one thing remains unwavering, our focus on what we can control. As we did at the outset of COVID, we will continue to demonstrate our resilience as we adapt to the changing economic environment with an emphasis on agility and an emphasis on stewardship. Today, CIBC is a bank with a streamlined and increasingly digitized infrastructure. Our collaborative culture and client-first strategy will enable us to drive profitable growth over the short, over the medium, and over the long term. You're going to hear more about our strategy, our capabilities, and our vision for the future, and to have the opportunity to connect with our leadership team more directly at our upcoming Investor Day. And now with that, let me turn the call over to Haraj to review our second quarter results in more detail. Over to you, Haraj.