Canadian Imperial Bank of Commerce (CM) 3Q16 Earnings Call Notes

Increase in sales force and focus on relationships has been key to growing retail banking segment

“On the personal side, again strong growth, good balanced growth in the total retail and business banking side, again balanced deposit and GIC, 8% growth on the lending side, 9% growth, so again trying to achieve a balanced book and those factors again go to things we’ve been working on for some period of time, building on deeper sustainable relationships and I think probably the key thing is the sales force and sales productivity, like we’ve really added to our sales force over the last few years.” David Williamson – Senior EVP, Group Head-Retail & Business Banking


CM is being cautious with mortgage growth, but is confident that relationship based sales team will prevent delinquencies

“Yeah, I think we are being prudent like, for example, on the business side some time ago we pulled back on commercial mortgages, right, we’re pretty much letting that book grow at a very moderate rate, we could really be growing that book if we wanted to be… You are right about the headlines on the housing market and Canadian indebtedness… And we feel really quite good about our growth in that market. But why is that? Well, first, it’s being done the right way through a much larger sales force. And secondly the productivity that sales forces is up and third, it’s important, based on client relationships like our team out there is very much embedded in the local community… it is a relationship based, balanced book.” David Williamson – Senior EVP, Group Head-Retail & Business Banking


CM believes the credit quality in the Vancouver market is strong

“I think that Vancouver has become a real international destination city, it’s a different market and we need to keep that in mind. It’s a strong and diversified economy and when we look at that market, the delinquency rates are actually lower than our national average. So we have not changed our underwriting standards.” Laura Dottori-Attanasio – Chief Risk Officer


PrivateBancorp acquisition will have an impact slightly higher than 100 basis points on CET1 ratio, but ratio will stay at 10% target

“I think as far as the PrivateBancorp acquisition is concerned, I think it may be slightly higher than that. But we have targeted to be a 10% and we continue to target that level, Mario.” Kevin Glass – Chief Financial Officer


CM rebuffs question regarding losses of mortgage insurers working with CM

“I hear what you’re saying but I guess, when we do our stress analysis here, we do our stress analysis based upon the impact that we at CIBC are going to have and not on the one that our insurer might have.” Laura Dottori-Attanasio – Chief Risk Officer