Canadian Imperial Bank of Commerce (NYSE:CM) Q2 2019 Earnings Conference Call Transcript

May 22, 2019 • 08:00 am ET


Canadian Imperial Bank of Commerce (NYSE:CM) Q2 2019 Earnings Conference Call Transcript


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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 Hratch Panossian, Executive Vice President, Global Controller and Investor Relations. Please go ahead, Hratch.

Hratch Panossian

Thank you, operator. Good morning everyone and thank you for joining us for CIBC's Investor Presentation for the second quarter of 2019. This morning, we will have Victor Dodig, our Bank's President and CEO kick off our agenda with his opening remarks; Kevin Glass, our Chief Financial Officer will follow with a review of our operating results; and Laura Dottori-Attanasio , our Chief Risk Officer will provide a risk management update. We will then move on to take questions from those on the call.

We are joined in the room today by CIBC business leaders, including Mike Capatides, Harry Culham, Jon Hountalas, Christina Kramer as well as other senior officers. They will be available to take questions following our prepared remarks.

The documents referenced on this call, including CIBC's news release, shareholder report, Investor presentation and financial supplements as well as an archive of this audio webcast can be found on our website at

Before we begin, let me remind you of the caution regarding forward-looking statements on Slide 2 of our investor presentation. Our presentation and our comments this morning may contain forward-looking statements that involve applying assumptions, which have inherent risks and uncertainties, actual results may differ materially.

With that, let me now turn the call over to Victor Dodig.

Victor G. Dodig

Thank you Hratch, and good morning everyone. This quarter, we continued executing our client-focused strategy and delivered solid results across our Bank. Through our connected franchise, we grew our client base, improved client experience, and strengthened the depth of our relationships. As a result, we announced adjusted earnings per share of CAD2.97 for the second quarter. Revenues and pre-provision earnings grew 4% year-over-year on an adjusted basis, supported by continued strength in our North American Commercial Banking and Wealth Management businesses as well as our capital markets franchise.

We also continue making investments to modernize our platforms, improve efficiency and enhance our clients' experience. On a net basis, our investments drove accelerated expense growth at essentially flat operating leverage. Despite market volatility, which was driven largely by geopolitical uncertainty, the economic environment continues to be constructive across our businesses while trends in our risk indicators and provisions remain benign. Our capital position remains strong with CET1 of 11.2%, continued capital generation was primarily offset by reinvestment for organic growth this quarter. Going forward, we anticipate generating excess capital over time and we will look to deploy it in a manner that maximizes shareholder value over the long term.

Turning to our business unit results. In Personal and Small Business Banking, we remain focused on our long-term strategy of modernizing our bank and deepening client relationships. This quarter, we delivered modest year-over-year revenue growth while continuing to make investments that will accelerate revenue growth in the