Canadian Imperial Bank of Commerce Q2 2019 Earnings Call Summary

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

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Just a question on the top line and I see the -- a couple of segments, like the U.S. was up year-over-year on margins and Canada was up sequentially, we see that. But at the top of the house, quite a different story. Margins look like a low point for -- as long as I can see. Anyway, just wanted to dive into that dynamic here because it's a bit way on your net interest income growth this quarter. And I tie that mostly to the corporate segment. Is that something that you can explain a bit more and what we should expect to see?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Right. It doesn't -- I mean you may not see it as meaningful, but we had negative net interest income growth for the first time in a few years. I'm just -- that's something in the trading revenue noise perhaps that led to that?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. My next question, maybe for Victor. I know that last quarter about your appetite for M&A in the U.S. And I -- if you want to talk generically about that, and maybe give me a sense of what you're kind of looking for? Is it more on the asset management side to bulk up Atlantic Trust? Or is it a banking type operation you're looking to build? And maybe expand the borders outside of the Midwest a little bit? If you can help me out there.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : A couple of, hopefully, quickies. Christina, you've mentioned the client relationship strategy. What do you look at to see if that's working or not? Because the revenue growth in your segment, I think, has never been lower. So when does this translate into something that is visible to us? Christina C. Kramer - Canadian Imperial Bank of Commerce - Senior EVP and Group Head of Personal & Small Business Banking-Canada So I think Victor spoke a little bit to that, Sohrab. So let me continue on. The metrics that we're looking at on client deepening and client relationships are tracking well. They relate to client growth, client depths and client experience, and we're seeing across the board positive trends. We've developed a proprietary metric that measures depth of client relationship that's consistent with our strategy. We've seen substantial improvement over the last 2 years. Our measure of relationship depth is not simply a product use count measure. And it looks at a number of factors, and I'd bucket them into 3: It looks at primacy of relationship, are we the primary bank of the clients? Engagements, is the client actually engaged with banking with CIBC? And then the quality of relationship. So is it a relationship traditional around product use count, a single product client or is it a high depth of relationship that we have with clients. And we're seeing positive momentum in respect of the client depths of relationship metrics. Again, as Victor mentioned, we do think over time, this is the right strategy and it will show out in our earnings. So while I am at it, why don't we talk a little bit about the revenue side because that's really where we will end up seeing the growth there. We -- our without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 22, 2019 / 12:00PM, CM.TO - Q2 2019 Canadian Imperial Bank of Commerce Earnings Call margins remain strong and are improving, which is indicative of the underlying profitability and the discipline in the business. Its volume has been lighter than our longer term targets, but has produced NII growth of 3.4% year-over-year on the back of margin strength. On the fee side, we have seen some headwinds that dragged overall revenue back to 1.8%. And part of this is noise due to IFRS 15, as we discussed last quarter. And some of it is due to market and internal factors. But underlying these top line numbers, as I mentioned, are the strong improvement in our depths of client relationship scores, the proprietary metric as well as positive client net acquisition and reduced client attrition, and that really speaks to the quality that Victor was referencing, the quality of our earnings as well the referral volume into other SBUs remained strong. So that combined with the investments we're making in advice and products and in ease of doing banking, we believe will generate and improve our revenue growth over the medium term. So we feel confident that we will achieve our Investor Day targets over that period.