Canadian Imperial Bank of Commerce

Your meeting is about to begin. Good morning and 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'll begin this morning's presentation with opening remarks from Victor Dodig, our President and Chief Executive Officer, followed by Raj 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 and Direct Financial Services, Laura DeTore Atanasio, Canadian Personal and Business Banking, and John Huntalis, Canadian Commercial Banking and Wealth Management. They're all available to take questions following the prepared remarks. As usual during the Q&A, to ensure we have enough time for everyone to participate, please limit your questions to one and then re-queue if need be. 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'd like to turn the meeting over to Victor.

Thank you, Jeff. Good morning, everyone, and thank you for joining us today. My remarks this morning will include comments about our third quarter results and the operating environment, as well as a summary of our key strategic priorities, which we outlined to you on Investor Day. Haraj will then provide a more detailed review of the quarter, followed by Sean, who will cover our credit performance, after which all of us will be happy to take any questions you may have. Against an increasingly challenging macro environment, our CIBC team delivered solid third quarter results with earnings of $1.7 billion Canadian dollars. Revenue growth of 10% was underpinned by strong net interest income and fee growth, as well as a 19% year-over-year increase in our connectivity revenue. Our asset quality remains very strong, with a net write-off ratio that is well below our pre-pandemic levels. Our earnings generated a return on equity of 15.1%, and our capital position remains strong with a CET1 ratio of 11.8%. The results were driven by organic growth in all of our businesses. We delivered solid volume growth in both consumer and commercial loans and deposits, and higher fee incomes. We also had strong contributions from direct financial services, a key differentiator for CIBC, which I'll speak to later. Let me turn now to our business segment highlights, starting with personal and business banking. Our consumer segment continues to see good momentum as we remain focused on executing against our strategy. Our priorities are to gain market share in the high growth, high touch affluent segment while delivering exceptional client experiences to all of our clients through leading edge technology. As a proof point, our strategic investments in providing personalized advice are contributing to solid client acquisition growth. On a rolling 12-month basis and excluding our Costco acquisition, we've added over 300,000 clients, 25% of which are in the affluent segment. This compares to our baseline of 11% in our current book of business. The continuous improvements we're making to our online banking platform have also been recognized with three awards this quarter. the number one ranking from J.D. Power for online banking customer satisfaction, and two leadership awards in the Digital Bankers 2022 Global Digital Client Experience Banking Awards. Our commitment to making our clients' lifetime ambitions a reality led to our recently announced partnership with Willful, an online platform for will creation. With this collaboration, we can offer our clients peace of mind through a convenient and affordable online estate planning tool. Going forward, we will continue to seek new and innovative enhancements to our digital banking platforms as we advance our digitization strategy and build our business with the affluent segment. So turning to our North American commercial banking and wealth management platform, we see continued solid loan and deposit growth on both sides of the border in commercial banking. Despite economic uncertainties, entrepreneurs remain cautiously optimistic about near-term growth opportunities. As a result, we expect to see continued growth with our clients across our commercial banking business. Our wealth management segment also performed well. The market declines in AUM were offset by positive net sales. We remain focused on growing our private wealth business to generate stable fee-based revenue, as well as increasing connectivity with the rest of our bank to drive referrals and to deepen client relationships. Our capital markets business performed well in a volatile market, with top-line growth in all business segments, benefiting from increased advisory services, higher foreign exchange trading revenue, and growth in our direct financial services business. The latter was helped by rising interest rates, robust volume growth, and new client relationships in both Simply Financial and in our alternate solutions group. We also increased currency transactions, which arise from recovery in travel and continued growth in our international student banking offer. As we enter the second half of this year, the geopolitical tensions and macroeconomic challenges from the first half are expected to continue, leading to more tempered outlook for second half GDP performance in both our operating regions. Now, despite the economic uncertainties, our CIBC team remains confident in our ability to navigate the market, serve our clients, and create long-term value for our shareholders while maintaining a disciplined approach to risk. We have a client-centric growth strategy, a disciplined leadership team, and an ability to manage the pace of our investments as the economic environment evolves. As presented at our Investor Day in June, our client-focused strategy consists of three priorities, the first of which is to focus on growing our share of high-growth, high-touch segment investments where we're well positioned. We have close to 4,000 CIBC professionals dedicating to building our business with the affluent and high net worth client segments. We have a unique co-location of our commercial and wealth management professionals to drive long-term relationship opportunities in the private economy. Our second priority is to continue to elevate the CIBC banking experience for our clients through investments in digitization, cloud-based technology, and further increasing connectivity across our businesses. We're focused on continuously adapting to the evolving financial services landscape. And our third priority is to continue to invest in our future differentiators that will make a difference to the growth profile of our bank. These differentiators include our direct financial services business, comprised of simply Financial Investor's Edge and our alternate solutions group, all of which are well-positioned to reach higher growth, digital savvy, and value-conscious clients. Another differentiator is our innovation banking franchise, which supports early-stage companies in technology, life sciences, healthcare, and clean tech sectors. We're also focused on modernizing our payments platform to better serve our clients as attitudes, behaviors, and preferences of consumers and retailers evolve, and our leading renewables organization and energy transition platform to support our clients on their journey to a low-carbon economy. So in closing, we're mindful of the challenges in the current operating environment and we're confident that we have a strategy and a foundation in place to deliver sustainable value consistently to all of our stakeholders. Our CIBC team has demonstrated our resilience in challenging environments in the past and will continue to demonstrate that resilience going forward. And with that, I'll turn the call over to Haraj.