Canadian Imperial Bank of Commerce

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 will begin this morning's presentation with opening remarks from Victor Dodig, our President and Chief Executive Officer, followed by Rob Sedrant, our Chief Financial Officer, and Frank Goose, our Chief Risk Officer. Also on the call today are a number of our group heads, including Sean Bieber from the U.S. region, Harry Cullum, Capital Markets and Direct Financial Services, John Huntalus, Canadian Banking, and Harash Panosian, Personal and Business Banking. They're 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. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. Management measures performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance. With that, I'll now turn the call over to Victor.

Thank you, Jeff. Good morning, everyone, and thanks for joining us today. I'll begin with a few comments about how our client-focused strategy continued to deliver for our stakeholders in the third quarter. before turning it over to Rob and Frank to review our performance in greater detail. Our core results were strong again this quarter, demonstrating continued momentum and consistency in execution, while positioning our bank for further relative outperformance. In a nutshell, our strategy is working, and it's working well. On an adjusted basis, we reported net income of $1.9 billion and earnings per share of $1.93. Our performance is supported by record earnings, underpinned by continued resilience in our credit performance. Our strong capital liquidity positions are foundational to our continued momentum in deepening relationships and attracting clients to our bank. We ended the quarter with a 13.3% CET1 ratio and a 126% LCR, both well above regulatory and internal minimums. This also gives us confidence to announce a normal course issuer bid for 2% of our outstanding shares. Adjusted return on equity improved to 14%, even with an elevated capital buffer. ROE is improving as a direct outcome of the momentum we have in our core businesses, and we will continue improving our overall return profile over time. I'd like to highlight for you some of the areas of strength across our bank in the third quarter that highlight this momentum. We'll start with our Canadian consumer franchise. where we are serving the Canadian mass market segment and meeting the needs of clients in the mass affluent segment. Over the past 12 months, we welcomed 640,000 net new personal clients to our bank across our CIBC and Simply platforms, continuing a trend of strong client acquisition and retention. During the quarter, we also launched new banking offer bundles for students and those in the skilled trades, to further strengthen our leadership position with priority client segments. In Imperial Service, we continue to serve the needs of our Canadian mass affluent client base and deepen relationships. Money in balance growth for our Imperial Service clients was almost double the growth in the same quarter last year, highlighting our emphasis on this segment. We're confident in our momentum going forward, because we've built up the client experience to enable our CIBC team to earn more business from existing clients and attract new clients to our bank. Our net promoter scores for Imperial Service and digital clients improved for another consecutive quarter and are tracking well above our fiscal year targets. Now moving to our commercial banking businesses. In Canada, client sentiment is improving with average loans up 2% sequentially this quarter. Our pipeline remains strong, and we're continuing to have active dialogue with our clients. In the U.S., we continue to focus on deepening client engagement and are making meaningful progress on the strategic rebalancing of our portfolio. This quarter, we delivered above-market growth in deposits and in C&I loans, while continuing to de-emphasize certain areas of our institutional and commercial real estate business. This continues to improve the overall credit quality of our U.S. portfolio, And Frank will provide more details in his remarks. While tighter monetary policy has slowed demand for loans in the industry on both sides of the border this year, we're expecting business activity to pick up through 2025 amid further interest rate relief and stronger economic growth. Moving to our wealth platform, which remains key to our long-term growth strategy. Our Canadian wealth business is performing well. While strong equity markets have contributed to the 20% increase in AUA from the prior year, our Canadian retail mutual fund net sales ranked number one within the Canadian bank group for the second consecutive quarter. These mutual fund net sales were supported by the early success of a recently launched CIBC investment-grade bond fund lineup, which had net flows of $1.6 billion into these funds during the third quarter. In the U.S., we are continuing to invest in our wealth business and expected to be a key contributor to our success over time. To scale our teams, we added more relationship managers and target markets this quarter that are aligned with our culture and our strategy. Our investments in CRM technology are paying off as well, as evidenced by improving client net promoter scores and higher cross-business referral volumes from our U.S. wealth business. Moving to capital markets and direct financial services, Our differentiated model delivered another quarter with strong top-line growth. In line with our strategic objectives, our U.S. capital markets presence continues to grow. Capital markets revenues in the U.S. region increased 24% this quarter versus a year ago, supported by our increased cross-business referral activity. Our highly connected approach is deeply embedded across the CIBC platform and in the CIBC culture, with connectivity revenue up 11%, on a year-to-date basis. We also made significant progress on our ambition to leverage AI as a strategic enabler for our bank. We added a number of tools across the AI spectrum in the third quarter. First, we launched a pilot of CIBC AI, a cutting-edge gen AI platform designed to foster innovation across our organization. This custom-built tool supports team members to improve productivity by providing access to powerful language models. Second, we are piloting GitHub Copilot, a tool that assists our bank's developers with providing code suggestions, automating repetitive tasks, and enhancing overall coding efficiency. And finally, we're rolling out a GenAI solution aimed at enhancing our frontline team members' experience and using our central information hub to better serve our clients. This pilot was recognized at the Best GenAI Initiative Technology Award by Digital Banker. As an early adopter of AI, we continue to recognize there is much more transformative potential if it's utilized effectively. Our strategic collaboration with the Creative Destruction Lab will enable us to leverage best practices from industry leaders, and our enhanced partnership with the Vector Institute will bolster our AI talent development programs. Our track record of innovation extends to our commitment to removing barriers for the next generation of leaders from the indigenous community as well. For the second consecutive year, CIBC received the Indigenous Reconciliation Award and the Innovation Award as part of the 2024 Employment Equity Achievement Awards. In closing, we are continuing to stick to our game plan and it's paying off. Our approach is clear. We are prioritizing high-return client segments, advancing digital capabilities, deepening client relationships, and realizing efficiencies across our footprint. We have a differentiated strategy. We remain focused on consistent execution, and we are delivering results today while positioning our CIBC franchise for the long term. And with that, I'll now turn the call over to Rob. Thank you.