Canadian Imperial Bank of Commerce at RBC Capital Markets Canadian Bank CEO Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Darko Mihelic - RBC Capital Markets - Analyst : So maybe we can unpack some of those.

Question: Darko Mihelic - RBC Capital Markets - Analyst : A little bit there. First and foremost, I wanted to touch on your view on margin and volume growth. And within the context of Canada. So, within Canada, the great renewal is coming up?

Question: Darko Mihelic - RBC Capital Markets - Analyst : Lots of mortgages going to renew. It's been a pretty competitive space. Some are suggesting that, hey, maybe margins can improve in mortgages. What's your view on the profitability of mortgages today? And how do you see yourself competing during this great renewal '25 and '26, frankly, this is going to be like. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 3:10PM, CM.TO - Canadian Imperial Bank of Commerce at RBC Capital Markets Canadian Bank CEO Conference

Question: Darko Mihelic - RBC Capital Markets - Analyst : And would it be fair to say that, that volume growth is back ended towards the end of the year just because we have to wait for rates to come down a bit? Or are you seeing good volumes today?

Question: Darko Mihelic - RBC Capital Markets - Analyst : So why don't we touch on that? I mean, why don't we touch on this tariff threat, some of the uncertainty here in Canada now, potentially having an election this year, not potentially, we will, question is the timing. So how is that factoring into what your clients are doing, what you're seeing? And what are you doing in response to some of this uncertainty?

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. And so that's helpful to think about from a macro perspective, maybe we can shift gears a little bit then and think about how that macro feeds into the capital markets business and your wealth business. And maybe you can talk a little bit about that outlook for us today. And is it different on either side of the border? Do you think that there's one side of the border that has potentially a stronger case to be made for the capital markets business that you have?

Question: Darko Mihelic - RBC Capital Markets - Analyst : And so what we've seen from some of the other players, and I'm not afraid, I'll use names. So for example, TD decided to acquire more cap markets business in the US and really build on it. And we kind of saw BMO do that a few years ago as well. And this gets back to when I think about your ROE and your target, and I think about what I've seen over the years with CIBC has been a very tight risk culture, producing a good ROE. And I think to myself, is there room for more risk here, Victor? Is there room for you to now tack on a little more risk, be it cap markets or somewhere else on the risk curve where you can maybe deploy some capital and go for higher return.

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. Fair enough. I wanted to touch on something that has become topical in Canada, anti-money laundering. And I wanted to get your sense on the issue and how you think about it developing over time? And if you can maybe touch on how you see the industry in Canada potentially tackling the AML issue because there is a sense out there that Canada has more work to do. Maybe you see it differently. So I'd be interested in your take on anti-money laundering. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 3:10PM, CM.TO - Canadian Imperial Bank of Commerce at RBC Capital Markets Canadian Bank CEO Conference

Question: Darko Mihelic - RBC Capital Markets - Analyst : And I guess, in thinking about that, does it change anything for you? I mean now that it's very topical, very -- does it change anything for you other than just that there's a spotlight on it and you're going to have to work harder. What -- does it change your capital deployment? Does it change expenses?

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. Fair enough. I wanted to touch on -- because I haven't been asking too many questions on guidance because it was just happened in December. But I think in this instance, I did want to touch on guidance for PCLs because there's a few noticeable things at CIBC. One is that your guidance for 2025 on provisions for credit losses was to land in the mid-30s range and maybe trending lower end if economic uncertainty subside. Maybe economic uncertainties just went up a little bit. But apart from that, how should I think about the risk to that guidance to the upside or downside? Because at the end of the day, the way I see that guidance is that, that number is actually higher than your fourth quarter PCL. So I want to put that out there to talk about how you see the PCL developing over time? And what are the -- what is it that could move it on either side of that range? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 3:10PM, CM.TO - Canadian Imperial Bank of Commerce at RBC Capital Markets Canadian Bank CEO Conference

Question: Darko Mihelic - RBC Capital Markets - Analyst : Yeah, I guess just from my perspective, I think that as rates fall, as the great renewal sort of commences, we heard some great statistics this morning on how many people are actually renewing at a lower rate. And so I think to myself that I don't see a big spike in unemployment. And so it just screams to me that the back half of the year could see significantly lower PCLs. I could be wrong.

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. So, it's time. I promised everybody that I'd go to questions from the audience. So I'm going to look at the questions that have been put in here and ask you the top 2. So, the first question is, could you provide some color on CIBC Imperial Service, its target market and how it helps you compete on customer relationships?

Question: Darko Mihelic - RBC Capital Markets - Analyst : Maybe just a follow-up to that. It's an interesting discussion, and I've always been very interested in it. So you mentioned, look, you've identified a section of your customers that could use an Imperial Service Adviser. You've got 1/3 left on the planning and you've got the Costco. It sounds to me like you need to do a lot of hiring in Imperial l service. And at the same time, I don't know what it's, I don't know what turnover is like, so maybe you can talk a little bit about hiring and turnover.

Question: Darko Mihelic - RBC Capital Markets - Analyst : A lot of hiring in Imperial Service. And at the same time, I don't know what turnover is like. So maybe you can talk a little bit about hiring and turnover.

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. Thanks for that. Another question from the audience, relatively straightforward, but I like it. What business lines in the US. are you most excited about and least excited about?

Question: Darko Mihelic - RBC Capital Markets - Analyst : So it's fair to say the least excited business is the commercial -- is it institutional commercial real estate? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 3:10PM, CM.TO - Canadian Imperial Bank of Commerce at RBC Capital Markets Canadian Bank CEO Conference

Question: Darko Mihelic - RBC Capital Markets - Analyst : And just that statistic that you shared there, which is interesting to me where 15% to 16% in the wealth business -- of your customers have their wealth business with you in the US versus double that in Canada. But there's typically a reason for that, right? I mean in the US they tend to not like that, to give so much of the relationship? Or do you see it differently?

Question: Darko Mihelic - RBC Capital Markets - Analyst : And is there a product gap there maybe that needs to be addressed to bring you over the finish line?

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. We're coming up to the point in time where I hand the floor over to you for your key messages that you'd like to leave for everyone here today for 2025.

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. Thank you very much, Victor.