Canadian Imperial Bank of Commerce Q2 2022 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 : My question is for Shawn. I mean the change in provisions there caused by the additions to performing, excluding the Costco stuff, I mean, it looks driven mainly by adjustments to your economic indicator, forward-looking indicators. I'm seeing more conservative versus last quarter, Canadian REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 26, 2022 / 11:30AM, CM.TO - Q2 2022 Canadian Imperial Bank of Commerce Earnings Call GDP, U.S. GDP forecast and the Canadian housing price index. Is it -- is there any -- one of these factors that's much more influential than the others, just to kind of get a sense of GDP in Canada and the U.S. more important than the housing price forecast?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Where do -- it's not -- is that just one you don't list than these...

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay, yes. I'll take a look.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Shawn, you are -- I guess you're on the spot today, I'm just going to come back to you. I just want to -- I hear you on the IFRS and the forward-leading indicators and the models and all of those tools that I guess management teams use. But as the Chief Risk Officer, when you stand back and you think about qualitatively the outlook, the quality of the portfolio and the growth that the bank has been delivering, do you feel adequately reserved? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 26, 2022 / 11:30AM, CM.TO - Q2 2022 Canadian Imperial Bank of Commerce Earnings Call

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : And just as a kind of addendum to that, you -- I think you mentioned the GDP growth forecast as one of the forward-leading indicators to higher rates and, I think, the debt service ratio. Is it fair to say that there was a countervailing balance here because of unemployment rate and that -- is that yet another area that I guess could become a negative here? Or are you -- how should I think about how you have factored unemployment rate outlook, I suppose, into -- in your thinking like that.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : We know you get rewarded for complying with the rules here. Harry, Capital Markets, I mean, I think loan growth there we keep on looking at it elsewhere. But Europe, I think 30% plus in loans in the Capital Markets segment, trading revenue at a record level. What are you doing differently there? And how sustainable is this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 26, 2022 / 11:30AM, CM.TO - Q2 2022 Canadian Imperial Bank of Commerce Earnings Call Harry K. Culham - Canadian Imperial Bank of Commerce - Senior EVP and Group Head of Capital Markets & Direct Financial Services Thanks very much for the question. So it's more of the same. I'll be honest. We have a well-diversified franchise. In terms of the loan growth, it is very well diversified across our corporate franchise, across our institutional client franchise, which would include insurance companies, asset managers, pension plans, private capital on both sides of the border. As I think I mentioned last quarter, we expect to see lending growth taper off throughout the year. And in fact, quarter-over-quarter growth on average balances was 8%, down from 10% last quarter. But more importantly, we're seeing growth across the platform. We're seeing very, very good results with our trading businesses, quite often in the less capital-intensive businesses such as foreign exchange. We saw 26% increase