Canadian Imperial Bank of Commerce

All participants, please stand by. Your conference is ready to begin. 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 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 Frank Guse, our Chief Risk Officer. Also on the call today are a number of our group heads, including Sean Bieber, U.S. Region, Harry Cullum, Capital Markets and Direct Financial Services, Laura Dottore Atanasio, Canadian Personal and Business Banking, and John Hantalas, Canadian Commercial Banking and Wealth Management. They're all available to take questions following the prepared remarks. With a hard stop at 8.30, please limit your questions to one. As noted on slide two of our investor presentation, our comments may contain forward-looking statements which include assumptions and have inherent risks and uncertainties. Actual results may differ materially. With that, I'll now turn the call over to Victor.

Thank you, Jeff, and good morning, everyone. My remarks this morning will focus on our performance and achievements over the past year and our outlook for the year ahead. But before I get into these details, I wanted to acknowledge members of our CIBC leadership team who are taking on new roles as we start our new fiscal year. Mike Capatides, most recently the head of our U.S. region, has transitioned to the role of Vice Chair CIBC Bank USA. With more than 25 years of banking experience, Mike's going to focus on developing and deepening client relationships in our U.S. region. Sean Bieber, most recently our Chief Risk Officer, succeeds Mike. Sean was instrumental in the acquisition of the private bank in 2017. And with his deep knowledge of our U.S. business, strong client focus, and proven execution in senior leadership roles across our bank, he will continue building on our momentum and leading our U.S. region. I'm also pleased to introduce Frank Guse as our new Chief Risk Officer. Some of you may be familiar with Frank from his most recent role leading strategy and transformation in personal and business banking. Frank's global expertise in all facets of risk management, coupled with his strategic perspective, position him well for his new role. These leadership changes leverage our strong and experienced internal talent, and they allow us to focus on delivering relative outperformance going forward. But turning to our adjusted fiscal 2022 full-year results, revenue of $21.8 billion was up 9%, and pre-provisioned pre-tax earnings of $9.4 billion was up 7% from last year. These results were driven by robust volume growth across all our businesses, which was a direct result of the continued execution of our client-focused strategy and the investments that we are making in growth, which will benefit our business in fiscal 2023 and beyond. Adjusted net earnings of $6.6 billion or $7.05 per share were down 2% from the prior year, mainly a result of more normal credit provisions coming off a year of performing credit releases in fiscal 2021. The credit quality of our portfolio remains strong, with impaired provisions down 1% compared to last year. Now, operating leverage was negative in fiscal 2022, and it relates to the investments we made this year in our current and future growth capabilities. While our structural expense growth remained in the mid-single digits, investments in strategic initiatives, as well as employee-related compensation and a normalization of business development activities, drove year-over-year expense growth of 11%. Our accelerated investments in growth were essential to strengthen our market position and to generate the strong top-line results we're seeing across our business units. With many of our key strategic and compensation-related investments now completed, we're now shifting to more moderate expense growth in 2023 to the mid-single-digit range, as we've previously conveyed to you. Our capital position remains strong with a CET1 ratio of 11.7%, while our return on equity for the year was 14.7%. We're also announcing a $0.02 dividend increase to our common shareholders while maintaining our payout ratio between 40% and 50%. Reflecting back on fiscal 2022, we made a lot of progress as we continued on our client-focused journey. At the enterprise level, we're delivering on our three key strategic priorities that we laid out at Investor Day. That's to focus on high growth, high-touch segments where we're well-positioned in making notable progress, elevating the banking experience for our clients through investments in technology and further increasing connectivity across our bank, and we're investing in future growth differentiators, particularly in our innovation banking franchise, our fintech capabilities, and renewable energy platform. As well as support of our net-zero ambition, we announced 2030 interim targets to reduce the carbon intensity of financed emissions in our oil and gas and power generation portfolios. In Canadian personal and business banking, we demonstrated positive momentum with our strongest client growth since 2017, where we added over 350,000 net new clients to our bank, 38% of which are from the affluent segment, almost three times the index of our market share in that segment. In addition to this, we successfully transitioned over 2 million Costco core brand card clients, And while it's still early days, we have already deepened our banking relationship with over 30,000 of these new card clients to hold additional CIBC products and services. Again, these clients also tilt heavily to the affluent segment. Our client growth and success in franchising drove year-over-year deposit and asset growth of 9% and 12% respectively, which resulted in market share gains versus the big six Canadian bank peer group. Contributing to these positive outcomes is our relentless focus on living our purpose, and that's to help make our clients' ambitions a reality. And we've done that by introducing enhanced digital tools for both our retail and business banking clients, underpinned by a focus on advice for the long term. And our efforts for this were rewarded with a second-place ranking in the J.D. Power Client Satisfaction Survey and being recognized for delivering outstanding digital client experience by a digital banker. Our Canadian commercial banking and wealth management business also demonstrated strong momentum throughout 2022, with loan and deposit growth of 20% and 12%, respectively, along with higher net wealth flows. In commercial banking, we continue to expand programs tailored to high-growth industries, modernize our systems, and streamline our processes to support enriched client conversations. In private wealth, we have added new planning professionals to further support our integrated wealth franchise, and we launched a series of exclusive private banking offers. The net result is a record year of net inflows for our CIBC Woodgundy franchise, which were up 27% compared to the prior year. Our private wealth offering is underpinned by the strength of our investment advisors and private bankers. This year, 30 of CIBC Woodgundy's advisors were named to Canada's top wealth advisors list by the Globe and Mail. And in asset management, we incorporated a climate policy in our responsible investing policy as we continue to focus on sustainability in our investment strategies. Despite industry challenges impacting net flows across all big six Canadian banks, CIBC was ranked third in long-term mutual fund net flows as a percent of AUM. Our U.S. commercial banking and wealth management franchise made significant technology and infrastructure investments in the business, and that's to support our above-market growth. now and going forward. In 2022, we had strong long growth. It was up 15%, and three-quarters of that was originated from new client relationships. Our focus on the private economy and high-growth client segments also drove strong client growth of 6% in wealth and private banking funds. Our efforts to build a best-in-class U.S. private wealth franchise were recognized again by Barron's. who ranked us as a top 10 registered investment advisor for the third consecutive year. In capital markets, our differentiated business model continued to deliver results. Our focus on strong cross-bank connectivity and growing our U.S. presence was rewarded with revenue growth from non-traditional capital markets clients of 14% and from the U.S. of 17%. We also made strategic investments in high-growth areas, including the expansion of our renewables, and energy transition industry vertical. In 2022, we were the recipient of Global Finance's North American Regional Awards for outstanding leadership in green bonds and transition and sustainability-linked bonds. We also continued to rank in the top 10 in North America for financings in the renewables industry, as tracked in Information's most recent league tables, notable accomplishments in our capital markets business. As we look ahead to 2023, global economic growth is expected to be slower as central banks continue with their monetary policy tightening to tame inflation. And in response to these headwinds, and as I just mentioned earlier in my remarks, we are going to continue to take actions to reposition our business to adjust to these new realities, but also continue to grow our client franchise and moderate our expense growth in 2023 to the mid-single-digit range. While we can't control the environment... We can control our execution, we have successfully navigated through challenging circumstances in the past, and we are confident in our ability to do so going forward and with that i'd like to pass the call over to rush over to you rush.