Canadian Imperial Bank of Commerce Q2 2020 Earnings Call Transcript

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

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : I just want to ask about the deferrals. And interesting that you put the proactive and reactive descriptions in the cards portfolio, that kind of hits at the, like needs versus accommodation or tactical use of these deferral programs by some borrowers. I'm wondering if you talk about it across the whole book, and especially on the tactical because if those numbers are quite high, you can give us comfort on how these deferral numbers are going to decline over the next few quarters and result in a much lower impaired loan number.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : I guess it's -- if I can -- if you could tell me like 80% of these deferrals are people that are just taking a payment holidays while they sort out their situation and then I'd expect those to get back to performing and paying by -- when the 6-month period elapse, that's kind of what I was after. Laura L. Dottori-Attanasio - Canadian Imperial Bank of Commerce - Senior EVP & Group Head of Personal and Business Banking, Canada Yes. Well, for mortgages, most of our clients, we offered 6-month deferrals, too. On the cards side, it was 2 to 3 months of, if you will, deferral and lower interest rates that they received. So I think you're -- well, comfort comes from of that segment of population, where we proactively deferred. As I said, just under 60% of those folks made voluntary payments on their cards.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Actually, if I can just follow up on that, Laura. One of the things you said was that the demand for credit is going to be a little bit slower, certainly in mortgages. Maybe just to turn Sumit's question on its head, is there a risk that you may have to get back into single-product relationship in cards as you push for growth in Canadian Personal and Small Business banking? Laura L. Dottori-Attanasio - Canadian Imperial Bank of Commerce - Senior EVP & Group Head of Personal and Business Banking, Canada Sohrab, well, I wouldn't call that a risk in that. In natural part of growth, you have to start somewhere with someone. And so that can be entry-level relationship you start with a credit card. We do see some stuff in the industry that shows that clients might also be migrating to a bit of a single product. But that said, regardless of the product we start with, whether that's a transactional account that we open, a credit card, or a mortgage, I would tell you, our goal is full client service. So it's how do we franchise that client so that we have a real and deeper relationship with them. So I wouldn't say that we don't want to have, if you will, just a credit card that might well be how we start off our relationship. But do know that the 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 28, 2020 / 12:00PM, CM.TO - Q2 2020 Canadian Imperial Bank of Commerce Earnings Call goal will always be to deepen the relationship so that we have deeper client relationships, which just goes to not only help us on the revenue generation front, but it does -- it helps us a lot from a risk mitigation front as well. And it allows us to offer even better service to our clients because we just know them that much better. So all around win-win, but it's okay to start with just one product. Does that answer your question?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. Congrats on getting that capital ratio back to top of the class.