Canadian Imperial Bank Q3 2026 Earnings Call: Complete Transcript

Canadian Imperial Bank (TSX: CM ) held its third-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

54, marking an eighth consecutive quarter of double-digit EPS growth, and a 14% increase in revenues to $8 billion. 4% return on equity, up 250 basis points year-over-year. T. S.

private wealth segment. Growth priorities focused on expanding the mass affluent and private wealth franchise, enhancing digital-first banking capabilities, and fostering client connectivity across its network. Management expressed confidence in navigating economic uncertainties, with expectations of stable to slightly positive net interest margins and continued focus on organic and selective inorganic growth. Full Transcript OPERATOR Good morning.

Welcome to the CIBC Q2 Quarterly Results Conference 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.

Jeff Weiss, Senior Vice President, Investor Relations Thank you and good morning. We will begin this morning's call with opening remarks from Harry Culham, our President and Chief Executive Officer, followed by Robert Sedran, our Chief Financial Officer, and Frank Guse, our Chief Risk Officer. S. Region; Hratch Panossian, Personal and Business Banking Canada; and Susan Rimmer, Commercial Banking and Wealth Management Canada.

They're all available to take questions following the prepared remarks. As we have a hard stop at 8:30, we ask that you please limit your questions to one. As noted on slide one 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 will now turn the call over to Harry. Harry Culham — President and CEO Thank you, Jeff, and good morning, everyone.

We reported strong second quarter results this morning that demonstrate the consistent execution of our client-focused strategy and the compounding power of our diversified platform. I will provide an overview of our adjusted Q2 results followed by an update on our strategic progress. I'll also touch on some announcements we made today aimed at strengthening our platform for growth moving forward. 54 for Q2, a 24% increase from the prior year, marking the eighth consecutive quarter of double-digit earnings per share growth.

Revenues of $8 billion were up 14% from the prior year, including double-digit growth across each of our businesses. Expenses were up 10% from the prior year and operating leverage was 4%, marking the 11th consecutive quarter in which we've delivered positive operating leverage. Provisions for credit losses were largely in line with our expectations for this stage of the economic cycle. While our outlook assumes some of the energy price and inflation pressures to be unwound over the balance of the year, potential disruptions from geopolitical and trade tensions remain.

Importantly, we are staying close to our clients as they navigate this backdrop and we remain comfortable with the overall credit quality of our portfolios. Our strong capital position provides us with a solid foundation to navigate the current environment with confidence. 5 million common shares. 4%, up 250 basis points from the prior year.

I'll now share some key highlights from each of our four strategic priorities which demonstrate the progress and momentum we're seeing across our bank. Our first strategic priority is to grow our mass affluent and private wealth franchise by delivering personalized, high-touch service. We continue to differentiate ourselves and build lasting relationships that drive value for our clients. And this quarter we continued to grow the number of qualified clients within our managed offering and drive higher money-in balances.

We also ranked in the top two for retail mutual fund long-term net sales among the Big Six Canadian banks. In our private wealth segment, our leadership continues to be recognized by the industry. S. Our second strategic priority is to expand our digital-first personal banking capabilities.

Our focus remains on making banking more convenient, accessible and personalized through technology. We are delivering on that commitment with new Amazon and Skip partnerships announced this quarter which give clients more value from their relationship with our bank. Our momentum extends to our online brokerage platform as well. At CIBC Investor's Edge, new account openings increased by 9% compared to last year, reflecting the growing demand for flexible do-it-yourself investment options.

Our third strategic priority is to deliver connectivity and differentiation to our clients. Our highly connected approach is deeply embedded across the CIBC network and is a defining element of our culture. By fostering strong collaboration and integration across our teams, we are delivering solutions that meet the evolving needs of our clients. This drives strong results across our businesses, particularly in Capital Markets, Commercial Banking and Wealth Management.

As a proof point, 58% of our Private Banking clients have a Wood Gundy or Investment Counsel relationship, a number that continues to rise. And our fourth strategic priority is to enable, simplify and protect our bank. Here we are leveraging AI as an accelerant to help us execute faster with operational excellence and compete more effectively from a position of strength and differentiation. We are building repeatable, governed and scalable capabilities that enhance client experience, operational efficiency, risk mitigation and, most importantly, cultural transformation.

Ultimately, culture compounds across technology cycles and we believe this is a key differentiator. The rapid adoption of AI across our organization has delivered measurable operational benefits, saving 3 million hours of productivity on a year-to-date basis. Our disciplined and consistent approach to capital allocation ensures that every decision aligns with our strategy and supports sustainable value creation. While organic growth remains our primary focus, we also leverage dividends, share buybacks and select inorganic opportunities to drive long-term shareholder value.

I would like to briefly discuss two recent announcements that will sharpen our focus on growth and strengthen our platform. T. 6 billion, subject to regulatory approval. Our proceeds will be comprised of US$1 billion in cash and a fixed number of common shares currently valued at US$645 million, representing a minority interest of approximately 22% at closing.

As we continue to execute on our strategy, this transaction will allow us to reallocate significant capital towards our highest strategic growth priorities. S. private wealth management firm managing US$54 billion in client assets. S.

S. and globally. Our focused approach and a deep commitment to our clients has driven strong business results. To further leverage the connectivity of our client-focused team both north—south and east—west, we will take our collaboration to the next level as we harness the power of our North American platform.

Effective immediately, we are realigning our businesses to reflect four strategic business units: Personal & Business Banking, Commercial Banking, Wealth Management and Capital Markets. Our external financial reporting will be aligned to these changes in Q4 2026. S. under the leadership of Susan Rimmer to further the momentum we've established in this business.

Susan and our Commercial Banking team here in Canada have built a strong business with a collaborative approach to growth. S. and Canadian commercial teams together will open up new opportunities for us to grow with our clients. S.

and Canada under Eric Belanger's leadership. Eric has led our Global Asset Management business since 2024, taking an integrated approach to our growth plans across North America. We believe the same approach across our broader Wealth Management businesses will accelerate our growth and create more value for our stakeholders. S.

region as we leverage our connectivity across businesses to deepen and expand client relationships. S. This is one of the hallmarks of our bank and I know Susan, Eric, Kevin and their teams will stay very closely connected moving forward. In closing, we continue to demonstrate our resilience through the cycle.

We delivered another quarter with strong financial results and improved strategic positioning. This is a pivotal time for Canada. A stronger Canada is good for commerce globally and our bank has a role to play. In periods of heightened volatility, our clients turn to us to help them navigate uncertainty.

And as the bank of commerce, we have remained committed to supporting them every step of the way. With that, I'll now turn it over to Rob for a deeper look at our financials. Over to you, Rob. Robert Sedran — SEVP & Chief Financial Officer Thank you, Harry, and good morning, everyone.

Let's start with three takeaways. First, it was another quarter of focused execution that delivered strong earnings driven by balanced revenue growth and positive operating leverage. Second, this consistent performance reinforces our confidence in our organic growth plans, a strategy That is complemented by the inorganic actions we announced today. And third, our capital and liquidity positions remain very strong even as we grow our client businesses, expand ROE and return capital to shareholders.

Please turn to Slide 9. 53. 54, up 24% from a year ago. 4%, up 250 basis points from the same quarter last year.

Let's move on to a detailed review of our performance. I'm on slide 10. 5 billion increased 23% and pre-provision earnings were up 19%. Revenues were up 14%, benefiting from balance sheet growth, improving net interest margins and higher fee income.

Loan loss provisions were modestly higher, though we remain comfortable with our absolute level of loss at this point in the cycle. Frank will discuss credit in detail in his remarks. Please turn to slide 11. Excluding trading, net interest income was up 14% with continued balance sheet growth and expanding margins.

All bank margin ex trading was up 17 basis points from the prior year and down 1 basis point sequentially, reflective of the Q2 seasonality to which we had previously guided. Canadian P&C NIM of 301 basis points was up 1 basis point sequentially as the continued benefit from tractors was offset by product mix and competitive pricing. In the US segment, NIM of 390 basis points decreased 11 basis points from the prior quarter, mainly due to seasonally lower deposit balances and lower loan margins. We maintain our expectation of a stable to gradual positive bias on net interest margins over time.

Slide 12 highlights fee revenue trends. 7 billion was up 13% helped by constructive markets and strong trading activity. Market-related fees increased 18% with particularly strong growth in underwriting and advisory, trading, investment management and custodial and mutual fund fees. Slide 13 highlights our expense performance.

Expenses were up 10% driven by revenue-linked costs, increased business activity and technology investments across our bank. Excluding performance-based compensation, expenses were up 4% from a year ago. We continued to pace our expenses relative to our strong revenue growth and delivered solidly positive operating leverage again this quarter. Slide 14 highlights the consistent strength of our balance sheet.

6%, up 20 basis points from the prior quarter. We delivered strong organic capital generation and benefited from a reduction in operational risk weights as disclosed previously. These were partly offset by an increase in organic RWA growth and continued share buybacks. Having now fully utilized our 20 million share NCIB, we have announced a new program for 30 million shares, or just over 3% of shares outstanding, pending TSX approval.

Our liquidity position is very strong with an average LCR of 131%. Starting on slide 15 with Canadian Personal and Business Banking, we highlight our strategic business unit results. Adjusted net income growth of 15% and pre-provision earnings growth of 16% were driven by strong revenue growth. Revenues were up 11% year over year, supported by 32 basis points of net interest margin expansion and loan growth.

The sequential decline in revenue was largely owing to the impact of three fewer days in the quarter. We continue to see tangible results from our focus on deep client relationships, selective balance sheet deployment and disciplined pricing decisions. Expenses were up 6% mainly due to higher investments in technology and other strategic initiatives and higher employee-related compensation. Slide 16 we show Canadian Commercial Banking and Wealth Management where net income and pre-provision pre-tax earnings were up 12% and 19% respectively from a year ago.

Revenues were up 17% from last year. Commercial banking revenues were up 10% driven by higher deposit margins and balances. Commercial loan and deposit volumes were each up 7% from a year ago. Wealth management revenue growth of 22% was driven by higher average fee-based assets and increased client activity driving higher commissions.

AUA and AUM were both up 24% compared with Q2 of 25. CIBC Asset Management ranked second among the big six banks in retail mutual fund long-term net sales this quarter and first in long-term net sales as a percentage of opening AUM. Expenses increased 15% from a year ago due to higher performance-based and employee-related compensation and higher investments in strategic initiatives. Turning to US Commercial Banking and Wealth Management on slide 17, net income increased 53% from the prior year mainly due to lower loan loss provisions, while pre-provision pre-tax earnings grew 10%.

Revenues were up 11% from last year driven by loan and deposit growth, higher net interest margins and broad-based fee income growth. Expenses were also up 11% due to higher employee compensation. Turning to Slide 18 and our Capital Markets segment, net income was up 40% from the same quarter last year as revenues were up 21% and operating leverage was solidly positive. Global Markets revenue saw continued growth across most products, benefiting from constructive markets and increased client activity.

Investment banking revenue was higher, mainly in underwriting and advisory, and Corporate and Transaction Banking revenues were supported by volume growth. We are pleased with the growth of our client businesses and continue to build those businesses. As such, based on what we see today, we expect H2 revenues to be above last year's H2 but down from the very strong H1. Obviously this view is subject to changes in an operating environment that remains fluid, to say the least.

Slide 19 reflects the results of Corporate and Other, which was a net loss of $47 million compared with a net loss of $15 million in the prior year. On this slide you also see the financial implications of the Caribbean transaction Harry referenced in his remarks. At closing, we anticipate that the deal will add roughly 25 basis points to our CET1 ratio after accounting for the deployment of that capital and our proportionate share of Butterfield earnings. We expect this to be marginally accretive to ROE but dilutive to EPS by a little over 1%, all else equal.

We also plan to book a charge related to the Caribbean in our Q3 results of approximately $350 million, which will be treated as an item of note.