Q4 2020 Canadian Imperial Bank of Commerce Earnings Call

Thursday Thursday, please standby or meeting is about to begin. Good morning and welcome to the CIBC quarterly Financial results call. Please be advised that this call is being recorded. I would like to turn the meeting over to Jeff White senior vice president investor relations, please go ahead Jeff.

Thank you.

And good morning. We will begin this morning's presentation with opening remarks on Victor, dodig our president and chief executive officer following Victor Raj panosian. Our Chief Financial Officer will review our operating results followed by a risk management update from Shawn Bieber. Our chief risk officer. Victor will close out the prepared remarks with a brief update on 20-21. We are joined in the room by CIBC Home Business Leaders, including Harry column Lord otori attanasio and John Hunt Alice as well as Mike capitalist who is joined us remotely from the US they will be available to take questions following the pack 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 meeting over to Victor.

Thank you, Jeff and good morning. Thanks for joining us and we hope you're all doing well. 2020 was a year where we experienced a once-in-a-century Health crisis that affected all aspects of our society at the same time. It was a year of continued transformation for our bank as we focus on helping make our clients Ambitions a reality are active with urgency and with purpose to support clients one another and our communities while building a relationship oriented bank for a modern world for the full year adjusted revenue of 18.7 billion dollars and pre-provision earnings of low-wage billion. We're up over 2019 while expense growth was limited to just 2% net of a higher provision of for credit losses that was primarily pandemic related adjusted earnings wage point four billion or $9.69 per share.

Our Capital remains strong with a seat see if you one ratio of 12.1% our investments in technology over the past several years to digitize and simplify our bank or allowing a provide real-time remote support to our clients at a time when physical distancing has become the norm. These efforts are being recognized by our clients with our highest client experience scores on record and recognition as the top-performing banking brand during the pandemic will continue to convert this momentum into deeper client relationships going forward.

Now let me turn to our business performance during the fourth quarter. We saw some improvement in the macroeconomic environment. The resulting increase in consumer activity was reflected in our Canadian personal and business banking franchise with monthly Improvement in card purchase volumes throughout the quarter client applications have also recovered from earlier lows and are generally back to Positive year-over-year Growth. We have invested enhancing our product offerings and leveraging Technology to capture this growth as the recovery takes hold.

Our Innovations also being recognized as rewards Canada recently named the CIBC dividend Visa infinite card the top cash back card in Canada.

We

Also continue to see positive momentum in our mortgage business in the fourth quarter with year-over-year spot balance growth of 5% and sequential growth of 2% to modernize is simplify the financial planning experience for our clients. We just launched CIBC goal planner coupled with expert advice the platform will play a key role in building comprehensive Financial plans for our clients bought well leveraging data and insights the guide decision-making and track their progress digitally, we expect personalized advice and Technology platforms like CIBC goal planner to create them both for a clients and for shareholders over time.

Turning to North American Commercial Banking and wealth management loan growth continued to moderate as businesses maintain their conservative stance towards growth-oriented financing given the uncertainty economic Outlook the choice to remain elevated in the fourth quarter as our client-focused continued to be on liquidity to support our Commercial Banking clients. We continue to invest in our cash management platform in our relationship management capability this along with our focus on growth markets will strengthen our franchise as the economy recovers despite ongoing Market volatility. We also saw continued robust net flows in our Canadian asset management and North American private wealth businesses.

Following exceptional third-quarter for a capital markets business. We deliver to solid quarter supported by continued strength and trading activity and a more constructive dead underwriting Market from a year ago about corporate banking commitments Marine strong increasing 10% year-over-year this quarter and surpassing fiscal 2019 8% 8% growth rate.

During the quarter. We also continue to increase our focus on environmental social and governance matters to help create a more sustainable future our commitment to our communities is stronger than ever that we couldn't Gather in person for the the Canadian Cancer Society CIBC Run for the Cure. We took the Run virtual and our team raised over two million dollars towards life-saving breast cancer research. We also took decisive actions to address systemic racism, including our recent partnership with the government of Canada to launch candidates first-ever black entrepreneurship Loan Fund, which will help grow black LED businesses importantly, we all continue to foster a more sustainable economy hosting our first first virtual sustainability conference and the inaugural issuance of a $500 five-year green bond to help Finance new existing green project assets and businesses that mitigate the risks and effects of climate change.

In addition CIBC was named one of Canada's top 100 employers are ninth consecutive year of receiving that honor reflecting the strength of our culture now with that. Let me turn the call over to her office for more detailed review of our financial results.

Thank you, Victor and good morning. Everyone starting on slide 8 this morning. We reported earnings of 1 billion dollars and diluted earnings per share of $2.20 for the fourth quarter of 2020 excluding items of note. We delivered earnings of 1.3 billion or $2.79 per share adjusted r o e improved to 13.5% for the quarter as our profitability continues to recover from the truck pre-provision earnings of two billion were down 3% from the prior-year reflecting the relative Resurgence of our Diversified franchise and a challenging environment revenues of 4.6 billion were down 2% year-over-year as balanced growth across our businesses and solid trading revenues partially offset, the impact of lower client activity and interest rates due to the COVID-19 pandemic strong expense management helps offset the pressure on Revenue with adjusted expenses declining 2% from dead.

as efficiency improvements out

East targeted Investments aligned with our strategy provision for credit losses of 291 million were meaningfully lower from the prior year and prior quarter Sean will speak to Provisions in more detail in a marks.

Turning to slide 9 we maintain the strength of our balance sheet over the squirter average of 145% was relatively stable from the prior quarter and well above the 100% regulatory Mission our Capital position continue to strengthen ending the quarter with c g 1 ratio of 12.1% or 11.9% excluding the ecl transitional benefit internal Capital generation and a decreasing rwas where the primary drivers of capital build and the quarter consistent with our previous guidance r w a migration was a modest had went to see each one in the quarter driven by negate migration our wholesale portfolios net of improvements in retail. We remain very comfortable with our current capital Outlook strong internal generation provides capacity to absorb further credit migraines and organic deployment in support of our clients.

The balance of my presentation would refer to adjust results which exclude items and no.

It's like 10:00 reflects our personal and business banking results where we continue to see positive Trends as you Revitalize the business net income for the quarter with 635 million up 5% off last year helped by sequential Improvement in revenue and pre-provision earnings as well as lower provisions on credit losses.

Revenue of 2.1 billion improved 4% sequentially, but remained 4% below prior year due to pressure on both net interest income and fees as a result of the ongoing COVID-19 pandemic wage expenses of 1.1 billion where comparable to both the prior year and the prior quarter going forward. We expect disciplined expense growth to resume in this business as we balance efficiency improvements often targeted reinvestment to revitalize our consumer franchise net interest margin of 243 basis points for the quarter was down 9 basis points from last year mainly due to declines and interest rate and it change in mix margins improved five basis points sequentially primarily driven by the end of the interest rate relief, we provided to certain credit card clients and growth and deposits cause we continue to expect moderate pressure unnamed over the medium-term as we absorb the full impact of recent changes in the interest rate environment.

Flight eleven shows the results of our Canadian Commercial Banking and wealth management business. Net income for the quarter was 341 million up 11% from a year ago primarily due to a stable wage earnings and lower impairments Commercial Banking Revenue was down 1% from a year ago primarily due to the impact of rates offset in part by strong deposit growth of 23% loan growth continued to be muted during the quarter but his anticipated to resume as the economic recovery takes hold wealth management Revenue was up 1% from the prior-year primarily driven by off balance is in private banking and higher fee based assets in our full-service brokerage business name was up 4 basis points year-over-year, but down two basis points sequentially driven largely by unfavorable rep.

non-interest expenses

like higher Revenue linked expenses in Wood, Gundy

Turning to slide twelve Commercial Banking and wealth management results reflect continued growth marking another record quarter for revenue and pre-provision earnings and local-currency. Net. Income of a million was down 24% from the prior-year in driven entirely by hire provision for credit losses revenues were up 4% as strong growth and client balances and hierarchy management fees helped offset lower margins and lower transaction alone. Peace despite moderating in recent quarters average loans to 13% from a year ago while deposit growth of 33% continue to outpace loans in our wealth business solid growth of 10% benefited from both client flows and Market appreciations net interest. Margin 277 basis points in this business up 1 basis points sequentially and down 22 basis points from a year ago driven by the continued decline in effect of Libor over the year and

The impact of lower-yielding triple P loans, excluding the impact of PPP. We anticipate margins to remain relatively stable as we continue to manage deposit pricing and optimize marja.

No interest expenses were down 4% reflecting the impact of our efficiency initiatives and the reduction and travel and Business Development expenses.

513 covers Capital markets where we delivered another solid quarter net income of $267 million was up 16% from a year ago driven by higher revenues and a lower provision for credit losses pre-provision earnings increased 15% largely as a result of higher revenues and strong expense discipline revenues of $792 million were up 7% from a year ago helped my growth across most Global markets businesses corporate Banking and debt issuance activity. These were partially offset by reduced Market activity and Equity issuance and advisory not interest expenses where largely in line with a year ago as Investments to grow the business where offset by efficiency initiatives, but fourteen reflects the results of the corporate another business unit where reported results were impacted by the items of note discussed in the appendix of our presentation on an adjusted basis net loss of a hundred seventy seven hundred seven million in the quarter compared to a net loss of twenty million in the south.

Reporter last year due to lower revenues and a higher credit provision partially offset by strong expense management, the COVID-19 pandemic continues to pressure revenues in the segment driven by the impact of lower rates and client activities in our International banking business and the cost of elevated liquidity reserves and treasury, we expect these factors to moderate when the recovery. Takes hold off finally five-fifteen shows our fiscal 2020 results, which reflect the resilience of our business in the face of significant disruption as well as the impact of ongoing transformation within our banquet in twenty-twenty. We delivered adjusted net income of 4.4 billion and ETS of $9.69 down 19% from a year ago driven entirely by the significant increase in our Provisions against performing loans record pre-provision earnings of 8.2 billion were in line with fiscal 2019. Despite the challenging environment wage.

driven by Modest Revenue growth

And strong expense management throughout the year in addition to supporting this year's solid performance the progress made and transforming our business this year positions as well to grow our franchise as a governor e. Unfolds. I will now turn the call over to Sean.

Thank you very much and good morning, while the start of the fourth quarter saw the continued reopening of economies following the restrictive measures implemented at the onset of the pandemic by the end of the quarter. We were starting to see a Resurgence in case counts since then, we've had a mix of both challenging and positive developments with renewed restrictions occurring in many of the markets. We serve while at the same time promising news regarding vaccine development has been announced we've continued to evolve our analysis from prior quarters and exercise judgment where appropriate in determining our provision for credit losses for performing loans our overall price this quarter we're lower than the third quarter at this time. We're not seeing broad-based credit weakness in the portfolio and to date performance has been better than have been anticipated the start of the pandemic off our clients do business and personal have continued to exhibit prudent financial behavior and given the benefit of ongoing government support.

Where we have seen issues, they have Arisen in various unrelated sectors. And in many cases, we're experiencing issues before the pandemic as forecasted. We did see some additional migration from stage to stage three allowances, which we expect will be a continuing Trend over the coming quarters as net credit losses are expected to peak in the middle of 2021.

Turning to slide Seventeen provision for credit losses was 291 million in Q4 down from $525 million in the prior quarter with lower Provisions in both impaired and perform a provision on impaired loans of $178 million was down $122 million from last quarter largely due to lower insolvencies and write-offs experienced in our Canadian retail portfolio similar to the prior quarter the decrease in retail insolvencies with in line with the industry Trend as a result of lower consumer filings, the lower level of write-offs resulted from a combination of factors, including government support as well as the impact of the assistance offered to clients through our bank relief programs. We express we expect this trend will reverse over the next few quarters as the vast majority of the month ended and return to normal repayment status.

On the commercial side, we experienced lower Provisions in our Canadian commercial and wealth and capital markets businesses offset by an increase in US commercial provision. Non-performing loans was 138 million largely due to a number of model parameter updates along with some other moving parts that I'll speak to on the next slide.

Our credit portfolios have generally performed in line with our expectations this quarter that said we do anticipate additional negative credit risk migration across the portfolio absence of material Improvement in actual economic conditions over the coming quarters relative to our current Outlook. We believe we've imprudent and recognizing performing allowances to reflect that Outlook.

moving to slide 18

Allowance for credit losses grew by 3% to 3.7 billion this quarter and ended the year up 79% or 1.6 billion since q1 are performing provision was one thousand and thirteen million in Q4. There are a few elements within this number which we broken out in the lower left corner of the slide. The largest component was an impact of 128 million for several parameter updates in our model which we do periodically partially offsetting this we had a net $97 of allowances moved from performing too impaired which is what we would expect to see a certain lones tip from performing too impaired status reflecting the ongoing challenges of the pandemic. The last piece is 82 million of growth and Provisions related to a continuation of our normal course activity including the impact of f l. I guess we're a small help migration within our portfolios as we continue our risk rating activity and other portfolio movements.

Overall the loan losses this quarter were somewhat better than expected for both our retail and business government portfolios though as we've discussed before we believe the relief efforts have had a significant impact on these results particularly in the cards portfolio and delayed actual losses to Future quarters.

Do I need to slide nineteen? We provided details of our allowances coverage by line of business are allowance coverage ratio increased from 86 basis points in Q3 289 basis points in the current wage. The increase was mainly driven by higher Provisions recognized in Commercial Banking and CIBC firstcaribbean, we feel comfortable with the current level of coverage and remain focused on monitoring the credit quality of our portfolios for potential future adjustments.

On 520 we show our credit portfolio mix which remains well Diversified and consistent with last quarter are total loan balances were $460 billion and the overall quality of our portfolio continues to remain high nearly two-thirds of our outstanding loans are to Consumers the majority of which are mortgages with our uninsured mortgages having an average loan-to-value of Faith 2% The balance of our portfolio is in business and government lending with an average risk rating for the portfolio equivalent to a triple B.

This quarter we've included in the appendix the additional details we've previously discussed on specifically affected Industries performance of those portfolios is in line with our prior Outlook and expectations at this point.

Like twenty one provides the status of our client accommodations and credit quality details by segment. Most of the deferrals have now run their course repayments are within expectations off and we believe our allowance coverage reflects the current risk in the portfolio.

It's like 22 provides an overview of our gross impaired loans. Those impaired dollars were down mainly driven by Consumer loans the reduction in an impaired Consumer loans was principally due to place calls and collection activities in the quarter while new formations also trended lower. We do expect this to remain volatile in the near-term.

Shows the net right off and 90-plus day delinquency rates of our Canadian consumer portfolios in the current quarter. We had lower insolvencies and flow write-offs as a result of government support program and drink relief offerings. The late-stage delinquencies of Residential Mortgages are down as we work with our clients who were not part of the deferral program to bring their accounts current. Well personal anything blink. Once he's remained relatively flat quarter-over-quarter credit card delinquencies have increased we proactively enabled payment deferrals for credit card clients who are already showing vulnerabilities and payment difficulties at the onset of the pandemic. The increase in delinquencies is driven by a portion of these clients who have now exited the bank relief program and continue to have financial difficulties. However, the performance over all of the credit card balances that have now exited deferrals is in line with our expectations.

In closing the economic Outlook remains uncertain as we've seen an increase of new faces while also receiving encouraging news regarding the development of phobic scenes. We will continue to monitor changes in the macro environment and their impacts on our portfolios overall. We remain comfortable with the quality of our portfolios and are well-positioned to support our clients while managing through the crisis wage Provisions were lower this quarter. However, we do expect to see impaired Provisions Trend higher and peek in the middle of twenty Twenty-One as that occurs, and as we saw to some degree in the fourth quarter, I expect to see more of our performing allowance to transfer from stage to stage three and provide a partial offset the losses in future periods. I will now turn the call back to Victor.

Thank you for calling before we take questions. I like to share our thoughts on strategic Focus for 2021 and beyond our first priority is to reinvigorate our Canadian consumer franchise and this includes gaining share in our core personal small business product accelerating growth in our newly created direct Financial Services business and improving Asset Management. Net flows while delivering good performance for our clients. We've made good progress in each of these areas throughout 2020, but there's more upside to capture in the year and years ahead serving the Canadian consumers an important part of life. We do and our efforts will deliver enhanced value to our clients and growth to our bank as we go forward.

Our second priority is to continue as continuing our transformation Journey with a determined focus on bending our cost base and reinvesting a substantial portion of savings into high-return projects particularly as it relates to process simplification in technology enhancements.

And our third priority is to build on the advantages where we are performing. Well, including and Commercial Banking and private wealth on both sides of the border and in our Capital markets business, each of these businesses have plans to continue to grow and are also implementing new initiatives to enhance capabilities and fast-growing market segments like The Innovation economy and sustainable Finance.

Let me now provide some color on our performance expectations for 2021 in each of our strategic business units for a Canadian personal banking franchise will continue to build off our recent improvements home and work to get our business back to market levels of growth and doing so consistently assuming pandemic related constraints begin to ease in the latter half of calendar 21. We expect to see a pickup in consumer t

What's that?

and Commercial Banking while loan growth is expected to slow from historical levels. We expect we expect the return to growth-oriented financing as the economic recovery takes hold in wealth management. We expect to see an uplift a line to the economic recovery as investors. Look for alternatives to low rates on savings deposits.

Strategic hires in our private wealth businesses along with enhanced product offerings on a label us to grow our net flows and our assets under management.

Capital markets Equity issuance and m&a activity could pick up as corporate consolidations increase in the aftermath of the pandemic are strong connectivity across our CIBC franchise will continue a job opportunities and deliver enhanced Capital markets capabilities for our clients in Canada, the United States while the reopening of the economy provided some cautious optimism in the fourth quarter the recent increase in infection rates as many municipalities imposing greater restrictions, and that will continue to have an adverse impact on the near-term economic Outlook. Our Economist forecasts assumes that mass vaccinations are effective treatments will be underway in the middle of 2021 allowing for stronger Global recovery in the latter half of the calendar year while this is our best forecast. We don't know how vaccine wage and efficacy will play out. So we remain Vigilant and are planning for a range of scenarios to allow us to move with agility as the current situation unfolds.

I want you to know this. We have a strong management team to lead the continued transformation of our bank as our investments help improve efficiency and to capture growth. We're agile or well-capitalized well provisioned and we'll continue to sensibly adapt to the changing macroeconomic environment and with that. Let me turn it over to the operator for questions. Thank you. If you have a question, please press star one on your telephone keypad. And your first question is from Abraham poonawala from Bank of America Securities, please go ahead.

Good morning.

Yes, so a couple of follow-up questions regarding your strategic priorities Victor in terms of integrating the Canadian franchise one talk to us in terms of your out for mortgage growth. If we do have a decent mortgage Market next year. Do you think the the businesses at a point where we should see. Like growth and secondly wage mean in terms of when you talk about tight expense management investing enhancing the technology platform. What should we expect in terms of the efficiency Outlook or just absolute expense growth that we think about next year off. Good morning Abraham. Thanks for the question. So let me just I'll provide a couple of comments. I'm going to hand it off to Laura on the mortgage growth more specifically and to her on the expense growth ma'am. I'm going forward. So you'll recall that we sent you a year ago that our goal is to get our mortgage growth in particular but our Canadian consumer franchise performing consistently and at the very least in line with

Market if you look at our numbers quarter-over-quarter sequentially over the course of the year. We are achieving that Target last year. We're negative.

This year were quite positive in terms of spot balances. We expect this to continue. We expect to keep Pace with the housing market as the housing market involves and we certainly expect to keep Pace with their computers in terms of our investments in our mobile mortgage advisors in a product offering with respect to expenses. We're trying to keep them in too low single-digits to reflect the economic reality things recover will roll with that economy and and and maintain our capture of The Upside. So why don't I do this Laura could provide more detail on the progress that she's making the Canadian personal bank and then her eyes can provide you a little more color commentary on expense management.

All right. Well, I think you answered that very well Victor. So I don't know if I have anything to add other than again a lot of work has been done to ensure that we can deliver more consistent and sustainable performance. And I think that's what we're starting to see in in mortgages in particular. And as you mentioned good news, we reverse the trend that we were on and we're now starting to close the gap with the competition so feeling very good about sort of the trajectory that we're on it may be over to harass on expenses. Sure. Thanks Laura and I think Victor covered the punchline Abraham and good morning, So we continue to be focused on expense management and we think it's an important part of the transformation of our bank. We've proven that we can deliver efficiency. If you look at this quarter down almost 2% on a year-over-year basis for the full year. We contained expenses to 2% in a year where we had tough environment on revenues. We contained operating leverage to modest wage.

So we're focused on pre-provision earnings and we're focused on operating lever. That's that's the way we sort of guide our expense targets if you will and so going into next year's we're trying to get a provision earnings to a growth trajectory. We're trying to get to positive operating leverage as soon as possible. And what is a tough environment, right? So to do all of that we're going to have to pull the levers and off, you know, we think of expenses and a few buckets. The first bucket is revenue linked expenses. And number of those will will be improving as performance improved but that from an operating leverage perspective and a provision earnings perspective. It doesn't work against our objectives. What we're really focused on is the other two buckets, which is our investments to against the strategies to transform the business and discretionary expenses. And so between those two were pulling the lever so that discretionary is eliminated where it's not value-creating and we're investing in the right places and Thursday.

None of those two will actually manage the outcome to get the pre-provision earnings and operating leverage where where we want to and as Victor said in the current environment. We think that means that low single-digit the recent wage structure in we did this year that's largely completed. It'll give us that full-year benefit of 250 we talked about and we Telegraph at the time that's going to allow us to stay at that low single-digit level. We think we have opportunities may be at that level while even accelerating Investments by doing even more in efficiency initiatives as we go forward in 21.

Thank you very much.

Thank you. The next question is from John Akin from Barclays, please go ahead just a quick follow on in terms of the efficiency discussion. I noted that you still got about 200 million left from the restructuring charge taking this year. How much do you think that can benefit your your expense plans in 2021?

Sure, thank you, and that that's a bit of accounting. So as we had mentioned on the last call we anticipated to largely complete that this fiscal year and we have done that so often it is mostly complete from a taking action perspective. And so the benefits will start accruing from an accounting perspective. What happens is when, when folks lacked deferred payments over time, then the accounting Reserve will come down over time as those payments are made to individuals. And so you're going to see that grind down slowly over time, but the benefit in the earnings will already be realized for fiscal year 2021.

Thanks. If I could add one quick one on and noted that first Caribbean moved from available for sale in terms of the accounting treatment. Can you update Us in terms of where the deal of the transactions? It's at this point? Yeah, let me let me just provide some perspective on that John and then we'll get into some of the technicalities just to remind everyone we have an Engaged buyer with a genuine interest in the Caribbean banking sector and a proven track record in banking.

Our business there like any other well-run banking platform is adjusting sensibly to the economic reality of the pandemic and it is good business going to recover the economy recovers. Our our our Focus now is to continue to pursue the regulatory approval process and that's been Complicated by the COVID-19 demek as well. When we have an important development on that front. We will advise our investors accordingly wage order was an accounting quarter and I just want to pass it on to her eyes for some of the technicalities around that sure. Thanks Victor and you know, you're going to have time as you do John to go through the same day and the notes to our statements in the annual report and you'll see all of this report. They're so not much to add to what's in the disclosures, but for the benefit of folks on the call, really the accounting classification of Health Care and the assessment of recoverable value on good we'll both of those are governed by the relevant accounting guidance under IFRS. And this was really triggered by us following the guidance. So really delineating the accounting job.

From the deal as Victor said so the change is particularly with the accounting and the corridor where it triggered by The increased uncertainty surrounding the deal as we've described in the disclosures and we spoke about Thursday or complexity of the regulatory environment COVID-19 complexities and so forth. And so that increased uncertainty given the technical requirements here when we consider the circumstances and the guy do we determine it was appropriate to discontinue the health for sale accounting this quarter and to revert to using an estimated value based on current market circumstances for the purposes of assessing the good life versus using the the terms of the actual proposed deal with gnd and so that's what really drove that but Victor said. We continue to proceed the transaction.

Thanks for which hopefully there?

I won't be leading into the Weeds on accounting or

thank you. The next question is from Gabriel from National Bank Financial, please go ahead yeah, are there any other implications of that accounting change other than like the value of life? I wish I assumed it on every other quarter or something like that.

No, there there wouldn't be Gabe's so we had as you recall. We had added disclosure specific child for classification. There was a summary balance sheet and so forth, but it put in. So that's really the only change and then the disclosures in terms of how we were accounting for the business. We had continued to consolidate the business and the earnings coming in through the corporate another segment. So that will contain. Okay. My real question is on the the mortgage growth strategy and I guess the overall growth strategy for the Canadian retail business and and victory you mentioned the word, you know, Market level growth and consistent growth and and Laura you reiterated that I'm what are you doing differently this time? Cuz a few years ago. We had a choice, you know a bit of a roller coaster move around in the the mortgage growth rate. There was really high at one point than really low. Like, what are you what are you doing differently to make sure it's more consistent than and I guess building better relationships with

Good morning, Gabriel. So I'm happy to take that one. I guess I would you know, I think it's worth mentioning that you have a new management team in across the board but over six mortgages in particular and we've given full end-to-end accountability for client Journeys to this management team, which I believe will make a difference and I guess mm. So on acquisition. I tell you that we're very focused on the quality of our growth and the anchoring of our new clients. And so that's will certainly help us on a go-forward basis off and then secondly you might recall in the last quarter. I spoke about retention and while I tell you that we haven't been a successful as I would have liked in terms of retaining some of our past vintage clients when they came up for Renewal, I believe we've laid the groundwork to ensure that we get not just better retention on a go-forward basis but better acquisition dead.

You know, we've worked increase our level and points of contact via the different channels. We've had we've eliminated friction points et cetera. So all of that to say that I expect to see improvements on a go-forward basis in mortgages and as Victor pointed out this is all about laying the groundwork so that we can deliver you more consistent and sustainable performance. I thought like invested a material just add to comments because you know business is heading in the right direction and it's all consistent with the long-term strategy that laid out when we say building a relationship oriented bank for the modern world. You gotta decoupled not just the numbers that you're seeing in the business, but also some of the numbers that we don't accentuate as much like our client experience course, our client experience scores at CIBC are the highest that they've been in two decades that has been a steady climb up. It is a reflection of all the things that we're doing to improve project.

To improve our product offerings which are way more competitive than they than they were before.

And super competitive relative to our peer group and that's why we're starting to win business on our checking account front. You have $6,000 in the bank with CIBC you pay no fees. We have Alternatives thread direct financial services and simply if you have less you can pay no fees threat direct think when it comes to our mutual fund offer. We launched our smart portfolios, which are more sharply priced than any other multi asset portfolio took her peer group again, you see a growth in the manage money portfolio. We've launched CIBC goal planner to build deeper relationships with our clients all of this stitched together with Lauren and the team's leadership around continuing that trajectory will deliver that against that performance Gap that we have and it'll close and over time the market will continue to see us as the bank. We are a new bank are relationship-oriented bank and one that's ready to take on the future.

Thank you.

Thank you. See you next question is from Scotiabank, please go ahead.

Hi, good morning. Just wanted to ask about the potential for Reserve releases through the cycle and specifically what would be reasonable timing. And and then also where would it be concentrated consumer versus the commercial loan books morning many, it's Sean. So thanks for the question. We expect as I mentioned in my prepared remarks that are impaired losses will increase going forward and Peak sometime mid next year. So obviously an uncertain environment but based on our current Outlook, we expect to average somewhere in the low-to-mid Forty basis points for impaired losses as those impairments come through we would expect to see the Performing allowance get pulled through a function of that and what's contributing to that impaired loss ratio, you know, you would have seen this quarter. We had a particularly low level of impairment this quarter that was driven by a dog.

Combination of strong credit performance but also some of the deferral activity that we had had and we expect to see that the proactivity particularly in the consumer side. We roll through Thursday. So as a result, we will we'll see that there was performing allowances sort of come through and offset some of those impaired losses in fiscal Twenty One in terms of that sort of how that the rest of the Performing allowance behaves relative to, you know, those loans that won't ever go impaired or statistically aren't expected to go and pair wage going to be a function of a bunch of different moving pieces credit performance Outlook. And so, you know, that will be over a 68 quarter. We expect to see most of that bill Thursday that we saw over the course of fiscal twenty one, you know, we we were up about 79% with our allowances you'd see that sort of pull through but that's going to be like there may be time.

this matches between those release

And what you see on the impaired side?

It's would be Switching gears a little bit just on a pre-tax pre-provision basis. Would you say did you have confidence that you can get to Palm PTP growth in in in fiscal 2021?

Yeah, man, that's our goal. That's our goal. That's you know, winning market share and bending the cost curve done right with some economic Tailwinds. We expect to start heading into positive territory.

Can you give us any more in terms of detail, like how positive and more specifically what are the key drivers there? Is it really about Revenue more than expensive? Yeah, so many maybe maybe I'll jump in and give give a little bit more color and all these C all caveat that was it's a tough environment to predict as we all know that but we'll base this on our current month our current expectations. So, you know, I think as we as we look at the revenues this year for the full year given the tough environment. We we had just over 1% growth on on Thursday the revenue side and not you know, modestly negative operating leverage. I spoke about which drove the decrease in provision earnings. So that's what we're trying to revert here and we're going to look at both sides of that thread in the expense and we alluded a bit too expensive earlier. But you know, I think the revenue side will be part of the story. So we are seeing some good momentum as we talked about in in the retail business as well as other business.

And so for a man nii perspective, we're going to continue have pressure from lower interest rates, but the balance grows with client business that we're doing in all of our businesses, you know, there's good momentum. We think as we get into that latter part of the year last year the latter next year the latter half. Once the recovery takes hold we think those will accelerate and so we think nii trajectory we start with our shifting from the sea perspective. We are also seeing some good momentum there. We are seeing the recoveries on the card side some of the foreign exchange on that is still lagging but you know all of those things as well later next year will come in wealth management side and investment fees. We've seen good momentum as we've talked about and we expect if markets they Cooperative that continues as well. And then on the cap Market side, we've seen some good strength on trading obviously a tough year as a comp but you know, it seems going to be working very hard to produce growth on top of on top of the Year this year from a revenue perspective. So we think Thursday

For Revenue relative to where we were this year hoping to bring revenues in at a higher Pace than this year. And then as I said, we're trying to contain the expenses to that low single-digit app much contained as possible. So between those two as we get later into next year, we think we can turn this around on the T and and eventually operating leverage as well.

Thank you.

Thank you. The next question is from scotch and from canaccord. Genuity, please go ahead good morning Victor in your opening remarks. You talked about robust Netflix on on both sides of the border. And you know, there's a lot of cash on the sidelines at low rates being reinvested industry-wide. But is there anything you can elaborate on that kind of specific this Thursday? And is it directed towards any certain client segments like retail private wealth or institutional? Yeah. Good morning Scott. Thank you for that question. I'd say there's a couple of things that are are driving. Our our net flows on both sides of the Border one is investment performance our investment performance in our Canadian Asset Management business and in our us management office management platform is in the top half and top quartile of performance consistently good across important asset classes to our clients.

I'd say the second thing is we've been really working hard particularly in the Canadian Market where a footprint is larger to ensure that our product offering is competitive relative to our peer group and is relevant to our clients. That's what's driving our growth. We not lunch something called star smart portfolios last year with smart beta embedded in them. And that is really really getting good Traction in our Canadian personal banking franchise off and then I see the third pieces on the higher net worth segment the strategy of putting together Commercial Banking and wealth management what we're seeing the monetization of assets from our clients and our Commercial Banking business from the sale businesses to private Equity or two strategic buyers. We're capturing those assets into our private wealth business in the us and our private wealth business in Canada wage notably in the you know, we've gone from zero to over seventy billion and over the last six years and in the fall of this year Barons ranked us the number to registered investment advisory.

In the United States at CIBC private wealth management something that you know, we don't focus on enough. So again three things investment Performance Products that are relevant to our clients and the remote control activity within our bank is quite robust, and we expect that to continue.

And and you talked about the commercial and and wealth management connection, maybe Laura. Maybe you can kind of talk about the strategy on the retail side and and in the wealth management and all that too may may coincide.

Sure, Scott, I'll cover sort of some of the retail and maybe on the wealth side. If John wanted to add in his views. I think it's Victor a lot of the fact that we've done I'd say in retail was really to start with laying that groundwork to deliver again, the consistent sustainable earnings. And so a lot of what we've done we've reprioritize our investments so into better digital capabilities so really on the starting with the sales and servicing capabilities, and then we're really focused on increasing our sales productivity, you know Victor referenced earlier on before the Q&A. He talked about that financial planning tool that we have so we think that's going to allow us to elevate Our advice offering cuz we have our clients who can come in either the banking centers or they can do sessions with us virtually. We think that's actually going to help move the dial. So we're really focused on on I would

those segments where we see that we can grow and I'm going to save and regain our

Natural market share, so we've done all the prioritization and I'd say twenty Twenty-One is really about execution. So what we've invested in has to deliver results with our being granular or being targeted and I think you're going to see and we're starting to see some of it better client experience and ultimately better results as we go forward for our shareholders wage, and maybe I'll stop there and see if John wants to add in on the wealth side. So most of most of what needs to be said has been said, the one thing I would add is our confidence level is high off and we are adding people in every channel and the wealth side to keep up with the flows everything we talked about is working. We need more people to handle the volume.

Thank you very much.

Thank you. The next question is from Doug Young from deja vu in capital markets, please go ahead.

Hi, good morning. It's just thinking about the all back all bank and you did mention the impact from higher liquidity in your comments as well. Wondering how we should think about this going into fiscal twenty one. So maybe we can think about like what was the impact if this will twenty one from the additional liquidity on your balance sheet and how do you think that unfold through Pisco you want and how does that roll through your your all Bank men? Just hoping to get a little bit more color on that very happy to elaborate on that. So so yeah. She look at the all Bank name. I think it's been a storage the degradation. We saw it through the year and then now stabilising, right? So this quarter all Bank name was was down only one basis points and you know, really the driver's wage and that are some of the benefits that we saw in the retail men with the recovery. They're offset by a small pressure from changes in mixed towards lower-yielding Pub.

The balance sheet so so that part is abating and that's related to to your comments with respect to the excess liquidity. So if I look at that piece particularly, it has been something that's built up the middle of the year and we've spoken about it quite a bit. You know, it's really because of the growth and deposits versus loans. We're pleased to have been growing deposits very robustly with our clients and with our data rights over eighty billion dollars over the year of growth and deposits versus, you know, just less than twenty million dollars on loans. So that tells has added up to the equity on the balance sheet. But you know that has stabilized in terms of the cost of that. It's you know, it's it's been sort of in it varies quarter-over-quarter, but it's been in that team's territory in terms of basis points impact them. But you know, I should point out. It's not a big negative to nii. It's really the balance so that you know, if you do the math just on the numbers I gave you it would say sixty, but it's more like a fifty billion dollar balance off.

Reach to the denominator that driving it. So so when that goes away that can recover pretty quickly. So when we get into next year, we do think that liquid is

Going to get deployed. We do think that loan growth is going to accelerate and we feel confident about that you years you've heard from Victor and the businesses just momentary moment ago. So has not happened. We think that that will start wage I mean facts down and that'll help offset some of the pressure that we still going to have from rates. And so net-net. I think those will help moderate the decreasing them from here.

And it's a built-in to you did a great job kind of that way. Anyhow, you think revenue and expenses flow next year. Is that built into your expectations or or is it not you know, absolutely it is that it is so what we would have built-in expectations is stable names in the as we've talked about we feel pretty good about that a small gradual decline in retail as we absorb the the impact of lower rates and a normalization of the excess liquidity all of those are important.

Perfect. And then just a second. There was a charge related to the consolidation of the real estate portfolio. Just hoping you can unpack with that what that is a cashier happy to do that and maybe Victor can start with the overall Square project because it is related to our consolidation and square and then I'll give you a bit more on the on the accounting. Yeah, thanks for that question again, I take us back to you know, what are we trying to achieve over the long term? We're playing the long game here. Well before the pandemic we had a vision to consolidate our head office footprint month and the 23 locations that we have scattered across the greater Toronto area where significant amount of our head office team is located in to a modern purpose-built headquarters, and it's called CIBC Square the example faiz the future of work and what I mean by that is it's flexible agile space collaborative space modern space. It reinforces employee wellness and convenience and we'll happy to highlight more of birth.

Into the future as we start moving in there and it's equipped with the most advanced ventilation Systems and Technology. So the and now with the pandemic it's allowed us to accelerate our consolidation package, which is the result of some of the accounting that we undertook this quarter as we move into a more normal environment. I got three points to highlight here one is our team is going to return to the office including c i b square + C square + into our other locations across Canada and what we're going to do this with safety in mind health and mind I'm going to do in the very staged fashion because keeping our team healthy and well and engaged is the most important thing to us. Some of our team members are going to work work remotely more permanently. We've had great success with their contact center team working from home. They're engaged. They're productive life speaking to our clients and making their experience much better. And the other thing I'll say is this I think it's important to recognize that many of our members have continued to serve our clients in, New Jersey.

Place throughout the pandemic that includes in our banking centers in our currency operations are technology operations and it's it's really been a team effort. I mean many of us have worked remotely some of us had to go to the workplace each and every day I admire them for their courage and what we've done is try to keep him healthy and safe and well protected while engaged with our clients now the accounting of what happens with the the state packs ended up to you not just want you to talk about accounting but it's part of the question that was asked sure. Thank you. Thank you Victor. And yeah, so as Victor said it was important context make this isn't something we've done in isolation. It was always part of the plan. We are not taking on more real estate. We are moving into square taking on and square footage and we were always going to give up square footage but you've always got our eye on optimizing shareholder value and creating value for shareholders. So in the current circumstance, we sort of looked at how we could optimize the exits that we were already going to do some of the spaces wage.

sitting vacant at this point in time with

Teams working from home. There's cleaning expenses utilities and so forth. So there really was a positive pay back for our shareholders when we looked at it too exiting some of the space earlier and then this is where it gets into counting the technical to the accounting since we adopted IFRS, I sixteen and put the right of use assets on the balance sheet is that when you vacate space at that point in time, you've got to take the charge and so this Thursday the corridor where we vacated a number of those spaces as people work from home until we get into squares Victor mentioned and so that was the hundred fourteen million dollar charge related to to the right of June plus a number of other things related to it with respect to the fixed assets on those properties properties and so forth. But as I said, there's a there's a positive pay back for our shareholders on that and that's why we took the decision when we did

And just sorry the what is the positive pay back into this is just a termination of lease is essentially is that essentially it so it is it is exit of the existing leases there is positive pay back from a few things one. There is a sublease recovery assumption. We've been very modest with that sublease recovery assumption that netted off that 114. We understand it's a tough environment, but there there are some some some leases here with value. The second one is related to some of those other expenses related to the properties. I spoke about and then the third one is really the the savings on the expenses on the on the future rent, but that you know to be fair that that offsets to some extent with the additional new cost of of moving into wage and those expenses.

Thank you very much.

Thank you. The next question is from Lamar Prasad from Core-Mark Securities, please go ahead my questions for Sean. I just want to take your answer on the phone now just because it's important to my estimates. I think you said that the impaired loss ratio would be in the load of mid 40 basis point range, but that's going to be offset by some performing releases. So my question is how should think about the total PCL ratio for 20 21 and thanks for the question. The the behavior of the Performing provision is you know, it's going to be um variable through the year. I mean as I said in the earlier remarks, uh, we built a significant amount of allowance coming into the pandemic over the course of birth to two and two three in particular a little bit this quarter as well and we anticipate that that would kind of run through that that incremental amount holding all else constant would would run through the p&l over call it a bath

The 1/4. But how that's going to play out. You know, quarter-to-quarter is going to vary based on a whole bunch of factors. So, you know, I'm reluctant to to put a particular number rounded I'd say there is a there is an amount of that performing provision that is going to move across, uh, as those impaired loans move because there's a certain amount of that performing a life. It would be booked against those particular loans, but for the balance of the portfolio that's going to be you know, as we've talked about the macroeconomic factors credit Behavior over the course of time and so, uh, I think you know, that's kind of a guidance that we could we could provide at this point.

and and and

The other thing I would say is over that 60 a quarter. Uh, it's likely a little bit more front-end loaded than back-end. You mean the the the release of the performance more front-end loaded just on the basis of the way the allowance is billed and then you know as the economic things play out the way there's the way they're they're forecasted to at least at this point you'd see those macroeconomic factors variables improve and so you'd see some level of that performing allowance come through over the course of time. Generally. It'll be probably more leading indicator, but there's may I just say quite a bit of uncertainty. It'll be more front-end loaded. We would expect got you and then at the end of that 6 to 8 quarter. Should we expect the ACL to revert back to historical levels or would it remain elevated from where you're at right now will take into account frankly all of the new information that we get having gone through this this pan wage.

There will be presumably portfolio growth at the same time so hard to say where it'll it'll land at the at the end. But if you think about sort of the Ark of the whole exercise when the planes hit we took, you know went through the portfolios generated or or recognized allowances, when you get to the other side of all of this where all those Provisions be you'd expect to see, you know back to some level of normalcy, but we'll be taking into account all of the the information that we that we gained through this whole experience to inform our allowances at the at the end of it.

Okay, thanks. And if I could squeak another one in there, so last quarter you provided some disclosure and what delinquency rates would be in the Canadian Consumer Portfolio, excluding the impact of dog is it looks like Residential Mortgages and personal lending is trending better than expected but cards a bit worse. Can you talk about the trans moving forward Lamar? It's Jeff. I can I can I ask you to reach George got a number of people in in line and we're going to run over. Yeah. Sure sure. We'll catch up after or recue. Thanks. No problem. Thanks. Thank you. The next question from Mario and Blanca from TD Securities, please go ahead. Good morning Shona pic to go back to your back to you. You referred to getting parents are impaired approaching a 2:45 into twenty Twenty-One. Now in parent loan losses were around 17 basis points quarter. If I'm doing it correctly that would imply to 2 and 1/2 months.

Increase in the imperatives in 2021. Is that really what what your guiding us to but a 2 to 2 and 1/2 * increase from this quarter and second. If so, what life items or what loans in particular is it credit cards here you would be sensitive to or commercial if you could help me into that. Yeah. So as I mentioned the this quarter the impaired loss is we're particularly low and impacted pretty significantly in the credit cards side from the deferrals so we would expect so and answer your question. I guess we're talking about uh, you know, low-to-mid 40s for impaired. Some of that is is going to be catching up for the credit card in particular deferral that will be running through. So I think on the consumer side, you'll see it less. So on the you know on the business and government side, that's as you know, historically pretty lumpy. We do expect it to come through over wage.

course of twenty-one

But but in terms of the the particular out performance this quarter relative to what we anticipate and what are what are allowances that we have built would be reflective of home. Uh, it'll be in parts of the consumer side and then the business and government which will be lumpy and episodic over the course of the year is is still our expectation.

Thank you.

Thank you. The next question is some dark from RBC Capital markets, please. Go ahead.

All right. Thank you question for Lord. Otori Laura as we do a post-mortem on on twenty-twenty. I've done some preliminary map. But I'm hoping you've done this not too and you can provide some items on it. I'm interested in understanding the revenue impact and credit cards so and and I don't really need it line by line. I'm just thinking about the drop in net interest income off the release he provided the drop in in in balances the drop-in revolve rates you name it fees. So if we look at 2020 vs 2019, how much did that bulb drop?

And how much do you think you can you can recoup in a recovery and maybe you can speak to the results so far in November? What is credit card usage look like in November. We bouncing back our balance back up or people using the cards again, or they spending on Christmas. So any kind of thought process there on just helping me pencil in a bit of Revenue pick up from people going back into credit cards.

Okay. Thanks Darko that sounded more like a statement than a question. But let me see if I can provide a little bit of color. I guess I'd start just by saying a lot of sort of the performance. We're going to see on a go-forward basis will matter like in terms of economic activity consumer activity. I would tell you that in the month of November. We have seen increased activity. We're expecting from an nii perspective and maybe this is a bit broader than cars. But as you know cars has higher margins so tends to drive more of the business. We do expect to see nii growth in the later half of 2021. So somewhere around the second quarter. So I do think that's going to help offset some of the bank impression that froch was talking about earlier. I think we're going to see some good usage from the cash back card that Victor talked about with our dividend enhancement card and the great ratings.

That we have when I look at our applications for those cards, they're up significantly, assuming those get utilized and we have a revolving balances. I would expect to see a better trajectory if you will in twenty Twenty-One and we seen in twenty twenty as you saw and I think we provided something that in our disclosure you can see where purchase volumes have come back somewhat and then remains to be seen if it continues but for the time being I would tell you that we're feeling pretty good job, including or Aventura card. We did a really good job in my view in terms of modifying some of the rewards that we provide so that they're not just travel and in fact from an outstanding perspective. We seen an increase in our outstanding and I would say almost flat from a purchase volume perspective. So I think we've managed to do well in that regard but as far off,

every day rewards cash-back cards go

That's I would say we're seeing more activity there from a purchase volume perspective and I would expect to see more from an outstanding, but it'll really depend on you know, move forward from a consumer activity perspective. Does that help answer the questions you had your I'd prefer to hear the the revenue impact in 2020 versus 2019. If you're not willing to provide that that's fine. So I'd like to know though.

You know in your assessment of twenty-twenty how much credit card revenues were down versus 2019 and totality if that if you have that number handy. I mean I am maybe dark all jump in its Raj, you know, I think Laura can maybe answer the anything more on the business side if you want, right, but we do not disclose p&l at the product both start with that but I will give you some pieces just to just to help you think through what you're thinking through and I think you're trying to get to what this means for twenty one more importantly. So when I look at this year, you're right, you mention a number of the pieces you can do the math on the on the credit card interest rate relief from the basis points. You see most of the five basis points increases Corridor. They said was related to that but I'll save you the math on that one. That was probably around sort of between the two quarters. It really impacted. It was kind of forty just over forty forty million dollars for the year. So that's one impact. The other one is which you would see coming in in the carbs.

He's line in our SFI, which I'm sure you've looked at and then there's also a piece in the effects other than trading piece that's related to Parts FX transactions. So on those, you know, the the car's life there is a broader line. So when you really just look at the personal and business banking element of that, you know sees them on cars this quarter where recovered they were down a bit more than this and the last couple of quarters, but this quarter they were still down about just over ten million and that number may have been double that the last couple of quarters and then on the FX side as well. There is about another month or number just over $10 this quarter. So when you look at about twenty or so this quarter from that line item and as I said that line was larger in Q3 and Q2 month and then you put that together with the Forty million dollars from the interest rate relief and then the balance I'm sure you can do based on the balance drop and the average outstanding you saw that'll get you a pretty good job.

denied credit here

that helpful. Thanks. Great. Yeah, that's very helpful. That's what I was looking for. Thanks very much. Thank you. The next question is from Nigel de Sousa from Veritas Investments, please go ahead. Thank you. Good morning. I had a follow-up for you on the payment deferral for your credit card book. And when I look at your reactive versus proactive. It looks like there's a Divergence there in credit performance and I was wondering if you could touch on you know, what characteristics specific to the proactive portfolio that's driving less favorable experience because when I look at FICO scores, they seem to be relatively similar.

Yeah, good morning. Thanks for the question. So the the population that we that we show is the the proactive we had identified a group of clients at the outside of the pandemic who are already experiencing some level of difficulty going into the pandemic. And so we we provided the that group with the ProActive deferrals at the time and I think we had this disclosure in our in last quarter's investor presentation that group would have been 68% of that group would have been current coming into the pandemic. So with the deferrals running off that group in a 75% current so actually an uptick so they've had more time to sort of, you know address their their financial their financial situations. We provided that religion and so relative to coming into the pandemic. They're actually doing better at this point. I would still early stages and we will continue to watch that portfolio very carefully, but that's what sort of gives rise to the Dead.

Financial between the two populations. Yeah, that's that's really helpful. Just a quick question on performing loan-loss provisions and I look at your for looking indicators looks like they've improved across each scenarios. So, you know the offset to that the mall parameter updates. Is that more so management overlay and scenario waiting driven. Could you just provide some cover there?

So we also had a scenario wait change. So we put more waiting towards the down side from the upside. So that would have also contributed to it back on that. It's been it's been sort of regular way risk rating activities Etc that's contributed to the the Performing balance this this quarter.

Okay. Thank you. I appreciate the call.

Thank you. The next question is from from BMO Capital markets, please go ahead.

Okay, thank you. Maybe Victor two quick questions for you. You've obviously done very well by the by the clients a lot of the actions you've taken maybe waving flags and what have you that beneficial both to clients and I guess the customer retention. Do you think brokerage commissions will go to zero in Canada.

I don't know. I think the most important thing in our in our model and I would say that we're not the low-cost producer our models relationship-based. Actually, if you lift the hood on our investors Edge business which sits within direct Financial Services as the simply Financial the biggest most substantive part. There is our Premium Edge service, which is very competitively priced clients are trading from $4.95. They actually have a relationship manager and it's very connected to our most affluent clients. So the business model works very very well for our other clients within our personal bank that are sort of mass affluent and course segments. We're priced $6.95, which is market-leading for the peer group Banks. The offering is very very good. It satisfies their needs so, you know, we will stay competitive. That's the most important thing.

I can tell you and

We will stay relationship-oriented in terms of our Focus.

Okay, and so when you look at it and you know, assuming credit is is enhanced so to speak and and you think about the recovery and your complex of businesses here. Do you feel like it's going to be more of a consumer or a commercial that recovery?

Well, let me just take a step back and talk about sort of my perspective on the on our perspective on the economy today. I think it's important to recognize that there are parts of our economy particularly in the discretionary consumer sector and in the small business sector that have really been feeling the economic followed of the pandemic. It's going to take some time for them to recover and they're an important part of our economy. So that is something that we need to be very mindful of we don't talk about it enough having said that I believe in Canadian and American entrepreneurial spirit and I see businesses starting to retool in terms of their business models and I think they'll come back perhaps there's some targeted government support will come back more quickly and you'll be there to support them.

You know from a broader, but I I I I I I I I think I think I can you give me the point. I mean, I think you've got the is actually very well positioned with improved sentiment as well. No it is Mike hepatitis is on the call. So maybe Mike if you want to chime in on that.

Sure. Thanks for the question. We think we are incredibly well-positioned for that. You know, we had a very good outing earlier this year with the triple P program. We we we got applications and funding in for literally every one of our clients who who who requested it took a lot of Goodwill our relationship based approach to Commercial Banking, you know, we're in contact with our customers around the clock and you know, I will say we you know looking forward we're we're positioned or position for growth with with those customers and lastly, you know, our our wealth platform, you know, you heard earlier that we we've had a positive net flows literally every quarter on the back of performance and the strength of CIBC, but something has gone unnoticed as we do.

We built out our private banking platform and you know, the loan balance is there are year over year are up almost 100% So we're feeling good about you know, how we're positioned for the coming year with our with customer sentiment.

I appreciate that. Thank you. I know. I know it's been a long call. So I'll leave it at thank you.

Thank you. Next question is from like from Credit Suisse Securities, please go ahead. Hi. Good morning. I wanted to go back to Laura on your mortgage growth and clearly you've had a pretty decent pickup. But when I look at your market share among the big six you actually you actually lost a bit more market share this quarter sequentially the last so I'm wondering if you're comfortable and maybe giving us a timeline on when you'll see IBC could see that um that market share steady or or potentially grow.

Hey Mike, I did I have the chart that you prepared that is locked in my mind. So again, I I do want to highlight that and you're right life. We're still in that 6th Place from a year-over-year growth perspective lost some ground in the last month. But again, I just want to point out in Victor said that we have a lot tighter performer distribution. I do feel we're headed in the right direction and the consistent sustainable performance is really what matters the most in this one. So, I don't know that I'm prepared to tell you, you know, it's one or two quarters in what I would expect and again, you know, there's movement from quarter-to-quarter, but that you will see a gradual improvement over the course of twenty Twenty-One. That would be the expectation. Okay fair enough and then really quickly, what are your thoughts on mortgages being an anchor product for your business dead?

It's something that I tend to think about with respect to what the broader implications might have been on the share that you've lost over say like the past year. Like when you do lose a client on a on a renewal wage that doesn't stay with cidc. Does that typically mean that they take over a lot of their other services with them to the to the competitor?

You know not really depends on the client and there are differing views out there. There's a lot of research that tells you that as we go more digital clients are more inclined to want to have that one product from that one institution. Um, you know, the way we operate in the competition, we're all the same once we sell a product whether it's a mortgage or credit card You Name It We all worked out through the client because it's just better. We know our client better. It's better from a risk management perspective usually better for the clients as well. But you know remains to be seen look awful lot of the mortgage growth we had in the past those were mortgages from clients that dealt elsewhere. So it depends it depends on on the client. I guess all I can leave you with is that would like everyone we work really hard from when we do provide a mortgage to try to Anchor that client. Cuz a we think it's better for the client and better for the organization.

Thank you for the insight.

Thank you. Ladies and gentlemen, this will conclude today's question-and-answer session. I'd like to turn the meeting back over to Victor. Thank you operator and thank you all for your very good questions and your choice. We've got kind of managed to an extended webcast. Let me go as close as follows. I want to tell you that our bank is performed. Well in a very challenging 2022 supported by a sound strategy. I've focused on deep client relationships Diversified earnings mix and a conservative approach to risk and expense management our investments and talent and Technology positions as well to provide remote, It depend emack & it's going to provide us with that support going forward in the year ahead. Whatever the economic trajectory will capture the upside as economic Tailwinds Prevail and we have a strong balance sheet to whether any prolonged economic downturns.

Today, we also announced that The Honorable John Manley will be retiring as the chair of our board in case Stevens.

And this served as a director of CIBC for nine years will take on the role of chair Upon A re-election or annual meeting in 2021, John Strong leadership and his commitment to inclusion of help us help guide our bank. Of change in the industry and strengthened our CIBC culture. I want to thank John for his guidance and counsel, and I look forward to working with Kate will bring a wealth of leadership experience took her new role. And before we end today's call. I want to thank our 44,000 CIBC colleagues globally for honoring our history of being there for a client and challenging times. I couldn't be more proud of how our team has rallied to support our clients to support our communities and one another as we lived our purpose in to our shareholders. Thank you for your continued support. Have a safe and happy holiday season and will speak to you in the new calendar year. Take care.

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Please note that this conference call has ended please disconnect your line at this time. Thank you.

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Please note that this conference call has ended please disconnect your line at this time. Thank you. She was finding nothing.