Canadian Imperial Bank of Commerce (CM) investor relations material

Strategic performance and growth

• Achieved a 17.4% ROE in Q1, attributed to disciplined execution and focus on affluent retail clients, technology investment, and targeted growth in both Canada and the U.S.

• Retail strategy emphasizes transaction accounts and credit cards over mortgages, leveraging partnerships like Costco to acquire digitally engaged, affluent customers.

• Capital Markets growth is driven by both cyclical market conditions and structural expansion, especially in the U.S., now contributing 35%-40% of segment revenues.

• Ongoing investment in technology and risk management supports deeper client relationships and operational resilience.

• Asset management and deposit growth are prioritized for profitability and client affinity.

Financial outlook and margin management

• NIM expansion is supported by both higher rates and a favorable business mix, with margin-enhancing products like checking accounts and credit cards.

• Margin tailwinds from structural hedges are expected to taper by 2027, potentially slowing revenue growth if balance sheet growth does not accelerate.

• Medium-term targets include 7%-10% earnings growth and expanding ROE, even as revenue growth is expected to moderate from recent highs.

• Operating leverage is managed through a continuous efficiency program, targeting 1%-2% annually, with cost savings reinvested to support growth.

• Share buybacks are used as a capital management tool, with a 2%-3% annual pace, and capital ratios expected to remain strong.

Risk, credit quality, and external environment

• Gradual increase in retail delinquencies and losses aligns with broader economic trends, but mortgage portfolios remain well-collateralized with low expected losses.

• Commercial credit quality saw isolated impairments, but overall guidance remains unchanged, with a focus on maintaining strong risk controls.

• No direct exposure to recent geopolitical events, but indirect risks are monitored, and strong capital and liquidity positions provide flexibility.

• Private credit exposure is managed with a focus on quality and diversification, with growth expected to moderate and align with overall bank growth.

• Inorganic growth is limited to targeted tuck-in acquisitions, especially in U.S. commercial banking and wealth management.