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 now like to turn the meeting over to Jeff Weiss, SVP 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, followed by Haraj Panossian, our Chief Financial Officer, and Frank Goost, 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, and John Huntalas, Canadian Banking. They are all available to take questions following the prepared remarks. As noted on slide two of our investor presentation, 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 call over to Victor.

Thank you, Jeff, and good morning, everyone. I hope you've all had a nice summer. I'll begin with a few brief comments about our third quarter results, including progress updates against our strategic priorities. I'll then turn the call over to Haraj, followed by Frank, to review our performance in greater detail before we take your questions. This quarter, we delivered solid core business performance by continuing to execute on our client-focused strategy while building capital, expanding margins, and prudently managing expenses. Net earnings of $1.5 billion, or $1.52 per share, were lower than the prior year and reflect higher provisions for credit losses, while pre-provisioned pre-tax earnings were up 5% during the same period. Due to changes to our forward-looking economic indicators, as well as the continuing normalization of credit conditions, we increased provisions in our consumer lending portfolios. The increased provisions in the commercial segment mainly relate to our U.S. office portfolio, which represents less than 1% of our overall loan book. We have a robust balance sheet, ending the quarter with a CET1 ratio of 12.2%. Going forward, we're focused on continuing to build our capital levels to ensure that we remain well positioned for any changes, as well as for any opportunities. We remain focused on our three key strategic priorities. growing our high-growth, high-touch segments, including our Imperial Service Platform and North American private wealth franchise, focusing on our future differentiators, which includes delivering leading digital banking solutions to Canadian consumers, and enabling and simplifying our bank. Now let me give you a few highlights on our progress. Our Canadian consumer franchise continues to experience robust growth. Over the last 12 months, we've added over 650,000 net new clients to CIBC, which includes 165,000 clients in our Simply franchise. We also continue to make good progress on our strategic focus to deepen high-touch, high-growth relationships in the affluent segment. Imperial Service, our unique advice-based relationship offer for our mass affluent clients, saw funds manage growth of $14 billion year-to-date, driven by successful client acquisition, as well as our focus on ensuring clients are in the right offer to get the advice and solutions they need from CIBC. Imperial Service is an important and differentiated asset for CIBC. We recently appointed dedicated leadership to directly oversee this key business platform, and we expect to see further momentum in this business. We're also focused on delivering leading digital banking solutions. We recently earned a number one ranking in customer satisfaction for mobile banking apps in Canada from J.D. Power, and continue to see increasing client engagement in our digital channels. 32% of our core retail products were sold digitally, and our digital adoption rate has increased to 84%. Looking at our North American commercial banking and wealth management businesses, higher volumes in organic client acquisition drove top-line growth in commercial banking this quarter, although the pace has moderated from peak levels a year ago. As expected, demand for loans has cooled as business owners take a more conservative approach to borrowing in a higher-rate environment and slower economy. In wealth management, our top-ranked advisors continue to provide high-quality advice to help our clients achieve their ambitions. Our high-touch personalized advice model, supplemented by digital tools, supported AUM growth this quarter with positive net flows on both sides of the border in our private wealth business. We also continue to benefit from referral activity driven through a focus on connectivity throughout our bank. In capital markets, our well-diversified business model and highly connected team across our bank delivered another solid growth quarter, driven by strong performance in our global markets business. Our strategic focus on our sustainability, renewables and energy transition franchises, was also recognized by Global Finance as the best investment bank in Canada and for outstanding leadership in sustainable infrastructure finance. We also continue to invest in optimizing our technology infrastructure and processes to enhance productivity. This includes leveraging the cloud to drive scale and speed to market, as well as automation of manual processes to reduce costs and improve cycle time and accuracy. Our efforts have resulted in significant cost savings so far this year, and are having a positive client impact with a 40% improvement in our client net promoter scores compared to last year. So in closing, we have a deep and experienced leadership team to make strategic decisions that position us for success, even in the face of challenging conditions. As we laid out on our prior calls, we have a clear momentum in the segments we've identified as strategic growth areas for our bank, and we'll continue to focus on them. We've moderated our expense growth to the mid-single digits while realizing the benefits of the investments we've made heading into this fiscal year. We've continued to build our capital and we've driven improved margins across our bank. Our business momentum, coupled with prudent risk management and our strong capital position, offers us the flexibility to adeptly navigate changing market conditions, adjusting our investments as needed throughout the economic cycle. Now, before I turn the call over to Haraj, I'd like to extend our care and concern to those affected by the devastating wildfires in British Columbia and the Northwest Territories. We are making available financial relief, advice, and support to our affected clients, including donations to CIBC Foundation's relief funds for the two provinces. Our thoughts are with you all as you begin the process of recovery and rebuilding, and with that, let me turn the call over to Haraj.