Canadian Imperial Bank of Commerce Stock

Okay. Welcome back. Our next presentation, we have Rob Sedran, CFO of CIBC from Canada. Welcome back, Rob.

Thank you. Great to be here. Thanks for having us.

Thanks. Let's just start off with, kind of, the market conditions in Canada. Over the past year, the word resiliency has often been used to describe both the consumer and commercial segments in Canada. Can you talk to some of the factors that you think are driving this resiliency? And how do you foresee these trends heading over the next 12 months?

Yes, it's interesting. The way you asked the question, it could almost be talking about the macro or it could be talking about our performance and the banking performance generally. And I would say it's actually a good way to ask the question because it's tough to have a resilient economy without a strong financial system. It's tough to have a strong financial system without a resilient economy. And so we're feeding off of each other a little bit.

Starting with the macro picture just generally, there's -- we've been in the trade spin cycle for the better part of 2 years now. But really, the effective tariff rate hasn't changed meaningfully from where it was previously. And so you've seen generally that resilience on display in terms of the underlying enduring economic strength of Canada. Not everything is about exports, not everything is about trade. And so you've seen relatively stable performance. The unemployment rate has hovered between 6.5% and 7% and the economic picture has been generally stable with some optimism on the horizon, I think, also helping to sustain it.

When you turn to then our performance as a banking sector, part of it is just the execution of the strategy. It's the compounding effect of deepening relationships and getting better and staying closer to what it is that we do. It's clearly been a constructive capital markets environment, which has also helped the wealth management business.

But our -- when we look at our credit books, it's been resilient is a good way to describe it. We've seen some -- a bit of a drift higher in delinquency, a bit of a drift higher in loss rates, but nothing that is concerning, nothing that is systematic. And so we expect more of the same as we look forward, both from an economic perspective and from an underlying performance perspective, things are reasonably stable with that positive outlook on the horizon.

Great. Great. Let's just dive a little deeper. You provided 4 strategic priorities you've previously identified, growing the mass affluent and private wealth franchise, expanding digital-first banking, delivering connectivity and differentiation to clients and enabling simplifying and protecting the bank. Can you discuss the progress you've made to date towards achieving these objectives and, kind of, goals for the coming year?

Yes. We've been talking about our strategy in this manner now for a number of years. And we've been making the right investments in the right technology, the right people and just pursuing that strategy consistently in each of our business units. When we think about that first one, mass affluent and just the private market, private banking side, we've been -- we've invested in tools like a digital goal planner or invested in an eCRM that's allowed the experience, the client experience to really improve, and you're seeing it in our customer satisfaction scores. And as we have those deeper conversations with clients, we're seeing the results of that bear out in the results. So double-digit growth in funds under management. We're acquiring clients and growing the mass affluent franchise at a nice clip on a year-over-year basis, and the results are showing through.

We think there's a lot more still to do even within just our own customer base, let alone customer acquisition and growing outside of our own customer base. We think just mining our own customer base for more of that opportunity is very much in front of us. And so we continue to make the investments and are quite pleased with the progress on that one. When you think about the digital side, it's very complementary to that mass affluent, right?

I mean there's not customers that are strictly one or the other, but we're even there, we've got our Simplii Financial, where we are engaging and replatforming the solution to provide our clients with a different channel that's still within our ecosystem. Investor's Edge, as an example, it's our direct brokerage. We have replatformed it. We're seeing very strong growth in client acquisition, very strong growth in AUA, safely double digits in terms of asset growth in that business. And it's really been powering the performance of the wealth franchise and the personal and business bank.

On the connectivity side, we talk about connectivity because it's such an important part of our commercial and corporate franchise that these businesses do interact and the face of the client should be one face. And so if you're a commercial client, you are seeing cooperation with the capital markets business on interest rate structuring, on FX structuring, on capital market solutions generally being brought into the commercial clients. The depth of relationship is strong. About 95% of our commercial clients have a deposit relationship with us. Roughly 1/3 of them have a wealth management relationship with us. And that number on the wealth management side isn't growing as rapidly because we're still acquiring clients, but we do continue to deepen those relationships. And so it's performing quite well as well and happy with the progress you're seeing high single digit to low double-digit growth in assets balance on both sides of the balance sheet.

The businesses on commercial banking on both sides of the border and in capital markets are performing quite well. And then that final pillar when it comes to Enable, Simplify and Protect, it's a very big and important pillar for us. It's about making sure everything from defense when it comes to cyber and AML, we're investing at pace. But it's also where we're deploying some of our AI solutions, whether it's AdvisorAssist, which are really helping the frontline advice, whether it's on our CIBC AI, which we've rolled out the first agentic AI solution in Canadian Banking to a broad network internally to be able to just change the way we work and change the productivity of how we work.

There's a lot going on there. So all of that, that strategy, and it's just kind of a quick flyby on the strategy but it's been what's driving compounding double-digit EPS growth, compounding increases in ROE. We've had a strong increase in profitability, a strong increase in earnings per share. And what gives us the confidence that a lot of that performance is sustainable and repeatable is the fact that it's on strategy and we're delivering on what we've been talking about for quite some time.

Great. On your recent earnings call, you announced an Investor Day for December 9. I don't want to steal your thunder, but I'm sure you are deeply in preparation for Investor Day. Maybe you can talk about some of the themes that you're thinking about and focusing on as you get prepared for this?

Yes. For starters, that flyby I just did on the strategy needs a deeper dive. And I'll give you a data point here, a data point there. But we do owe the market a set of KPIs and a set of -- to better understand the strategy to really be able to go deeper. And so we'll spend much more time on each of our pillars. We have to refresh the pillars a little bit. The way I described it, it sounds like just now, it sounds like there is a strategy for our retail bank, a strategy for our wholesale bank and you just kind of combine them into an overall strategy. It's kind of the reverse. There's an enterprise strategy that looks at making sure we're deepening relationships, making sure that we're using innovation and technology, making sure that we're optimizing the expense base and optimizing the businesses that are a little bit more commoditized. And you'll see that in each of the businesses.

So we're going to reframe a little bit how we talk about our strategy, the execution and the direction that we're taking isn't changing. But the way we talk about it will hopefully help the market understand a little bit better how we're executing against it, what makes it repeatable. We owe the market a refreshed set of targets as well. I mean we've been -- our official ROE target is 15% plus. We're 16.9% year-to-date. So we do owe the market a bit of a refresh on targets. And we want to spend time a little bit of time on a couple of things that we think are underappreciated in our bank, one of them being efficiency. The top line has been quite strong, and we've been quite pleased with the operating leverage performance that we've been putting up. But because we talked so much about the top line, we probably haven't talked as much about what we're doing from an efficiency perspective. And we think the opportunity is very significant in front of us, particularly as you expect revenues to slow once the capital markets activity normalizes a little bit.

And the other is just resource allocation generally and how we think about resource allocation because each of our businesses, they're quite complementary. And they use resources a little bit differently. So rolling this up into an overall strategy that helps you better understand our bank, better understand our management team and our leadership and how we work internally, what we mean by connectivity and a little bit of talk about disruption. There's a lot coming. As you say, we're deep in the preparation for it. Excited to tell our story and excited to be able to go a little deeper.

Great, Rob. So sitting here a year ago, you've seen your ROE expand about 260 basis points. Maybe you could help us think about how much of that improvement would you like kind of allocate to structural improvements versus how much is a function of better market conditions, whether it's capital markets or interest rate or credit quality.

Yes, there's been a pretty significant focus on ROE in the marketplace over the last little while. And we're -- in a lot of ways, we're happy to have the company because we because we've been focused on ROE as a bank for quite some time. In fact, the strategy has been constructed, it's really about improving the return profile and improving the repeatability and sustainability of the results. So when you think about what's really underlying the strategy, it's about making sure the deeper you go on relationships, the more you're going to get both sides of the balance sheet, the more you're going to better understand your client, the better understanding you have with the client, the better your loss rate performance should be.

All of these things are ROE enhancing. There is no question -- so I would say that the ROE improvement that we've seen is very much structural in terms of the profitability that we now are comfortable putting up. What -- the cyclical component of this, and you mentioned the capital markets environment being constructive, it clearly has been not just for us but for the industry. It's perhaps advanced a little bit in terms of the pace at which we've gotten to where we thought we would get over time. But it's consistent with the strategy. It's consistent with what we've been doing. And we actually still think there's more opportunity to continue to move in that direction.

So as much as the environment has helped -- and clearly, interest rates and markets have both helped, we think that there is a structural improvement in our profitability that we're comfortable is enduring.

Great. Maybe I just want to talk a little bit about capital. The OSFI as recently reduced the domestic stability buffer, also dropped the CET1 ratio to 11%. You guys are sitting at, like, 13.4% at 3Q. And then the completion of the sale of CIBC Caribbean adds another 20 basis points plus maybe in first half '27. Going forward, where do you think is an appropriate capital level to run the bank? And how quickly do you think you should get there?

Yes, those are 2 questions, right? I mean when we think about appropriate capital levels, higher is always better in terms of just the strength and the optionality that it provides. What we've said in the past is we think minimum capital being something in the area of 75 to 100 points clear of the regulatory minimum, which OSP's recent move now is 11%. So that would suggest 11.75% to 12% being a minimum. Beyond that, you want to have a bit of a buffer to your minimum just to give you some operating flexibility. And so in terms of what we target internally, it's a little bit higher than that. But again, it's really to be able to provide the optionality that you want to have to support your clients.

Like the encouraging thing about the environment we've been in, is that when things do get unsettled in the marketplace, whether it's geopolitical, whether it's trade or any other issue that happens to come forward, we're quite confident right now in just telling our front lines, go talk to clients, service the clients, work with the client to get to where they need to be. Don't worry about us, we're fine. And that's part of the operating philosophy behind the capital ratio.

So we have -- we're sitting at 13.4%, to your point, likely to go higher over the medium term or the near term as our divestiture in the Caribbean closes. But we're not in a rush to get down to a specific level. Like we feel like we've been delivering on all of our financial targets. You mentioned the pace of ROE expansion. We've been delivering EPS growth that's in the double digits now for 9 or 10 quarters in a row. So all of our financial targets are being hit while carrying excess common equity, while carrying excess liquidity. And it's the right way to run a bank, right? Things do go bump in the night. So there are opportunities that present themselves.

We're not thinking inorganic, we're very much an organic capital deployment strategy. We do think over time, there will be opportunity to deploy more into organic growth. So when we think about capital, it's where we're comfortable operating and how quickly we want to get there really are 2 different questions, and we're comfortable with the levels of capital we're running today, particularly since we're delivering on what we're trying to deliver.

Great. Some people have kind of stated that they think that the Canadian banks are holding on to capital in anticipation of an acceleration of loan growth in 2027. In 3Q, the Canadian commercial loans grew at a healthy 7% year-over-year pace. What do you see as the main drivers of that growth and do you expect this momentum to continue into next year?

It's been a fairly diversified portfolio of growth that we've seen. There's no specific industry that I would call out. I mentioned earlier that the -- there's a lot of the economy that's not tied to trade. There's a lot of the economy that continues to just grow. And it's been across the board, a strong performance, which we expect to sort of continue. There's a lot of talk, particularly on the trade file around when are we going to get some clarity and what's going to happen next.

But one of the things that it has done for the Canadian economy is it has woken us up a little bit to the realization that we need to have other pillars to rely on from a growth perspective that are complementary. It's not an or strategy. It becomes an end strategy. So when we think about the Major Projects Office that's been stood up in Canada, when we think about infrastructure investments, we think about the development of the North. We think about the defense industry, which we put a target out in supporting $2 billion and to support the medium-term outlook for the defense and resiliency industries in Canada. When you think about international trade flows, when you think about interprovincial trade barriers being reduced, there's a lot of things that become additive to whatever ends up being the story on trade flows within the country.

And so all of that together gives us -- we don't think it's a misplaced optimism about the medium-term outlook for Canada. A lot of those things that I just described, they're not quite yet finding their way into the pipeline today of growth which we still think is a robust one, both on the capital market side and on the commercial banking side. We think there's opportunity to continue to grow into 2027. That will ultimately be augmented by some of those things as they come a little closer into the forecast horizon, if you will. So for the coming year, it remains fairly diversified. It remains across our businesses more business led, I would suggest, and consumer led in terms of the growth in the coming year. The consumer side still feels like it's a low to mid-single-digit kind of growth profile where the business side feels more in the mid- to high single-digit kind of growth profile.

Great. The flip side of the question always to higher loan growth is often followed by credit quality concerns down the road. I think in the recent quarter, you pointed to a handful of idiosyncratic loans having an outsized impact on impaired. Maybe can you briefly review these credits, why you feel comfortable with the overall exposures?

Yes. We've had, particularly at our commercial bank in Canada this year. We've had a few of these files that we've they were kind of on the watch list for some time and they tipped over into impaired over the course of the year. And when you have a few of these files tip over and idiosyncratic is one of a bankers' favorite words, but in reality, you kind of go back and look and can you find a pattern? Is there anything here that would suggest there's something wrong in a pocket of the book and a pocket of a country in a specific industry somewhere. And there's really no pattern to be found among these things. It just feel when you have a diversified portfolio at any given time, there's going to be a few accounts that are wobbling regardless of the economic environment. And that's what's been happening to us this year.

So losses have ticked a little bit higher. It doesn't feel like anything concerning. And it's well within our risk tolerance and well within our expectations in terms of performance for the environment that we're in. The issue when you start to talk about commercial, particularly commercial and corporate loans, is it doesn't take many of these files to tip over into impaired to move a basis point to move another basis point or 2. And so in terms of basis points, our loss rate has bounced a little bit higher than it has been in the last few years, but it's nothing concerning and nothing that feels like it's getting away from us in any way.

And the business that we're putting on today, there's good business to be done in bad times and good times, just like there's bad business to be done in good times and bad times. And we're very much focused on doing the good business, growing with the right clients and taking advantage of the opportunity of having a strong balance sheet of having a strategy that resonates with our clients and our -- on both sides of the balance sheet to continue to grow our business. So we're comfortable with the risk profile. We're comfortable with the credit book. And we do think we're -- again, there's always a path dependency when you talk about credit. But for what we can see from a macroeconomic perspective, we're comfortable with where we are from a guidance perspective as well.

Right. Excellent. So one of the major drivers of CIBC's performance over the last year or so has been the material expansion in the net interest margin. So still the pace of NIM expansion in Canada has slowed while faster loan growth relative to deposits has been a headwind on the U.S. NIM kind of given these factors, how much runway do you see left for NIM expansion?

Yes. We still think there's some. I will say the caveat on that interest margin is always that there's no piece of guidance that we give that has more assumptions embedded within it than the net interest margin. There's a lot of moving parts to this. And so I try to -- when I try to discuss this internally and externally, to kind of think about it in 3 different buckets, right? One of them being our hedging and positioning strategy of essentially a lot of our noninterest-sensitive deposits and what are we doing with it? It's a pretty -- in Canada, we call it tractoring, in other markets, you here the words like laddering.

Essentially, it's just the reinvestment of those flows that come in it's an oversimplification to suggest looking at the 5-year swap rate, but it's not directionally wrong to look at the 5-year swap rate in terms of what's happening. And when you think about the hedges that are rolling off and the hedges that are rolling on, there's still a pretty healthy gap between those 2 things. And particularly as the interest rate environment remains fluid. For what we can see today and where the forward curve is today, those lines don't really intersect until somewhere deep into 2027 at this point.

So we still think that hedging and positioning part of the story is going to provide that basis point or 2 of quarter-on-quarter improvement of the net interest margin at the all bank level. The second bucket is the one that's a little bit harder to predict, and it comes down to business mix, right? And particularly, part of that is client driven, and part of that is strategy driven. Like we have deemphasized the mortgage as a customer acquisition channel, single-product mortgages don't interest us. And we are not active in the mortgage broker channel. And so we are not looking to be out front of the mortgage business. We're going to grow the mortgage business aligned with our clients.

And as one of the products we offer to our deep client relationships, for sure. But our focus has become much more on everyday banking, which means checking accounts and credit cards. Both of those are margin enhancing. Now so as we pursue the strategy, and that's really actually been the bigger driver of our margin expansion over the last couple of years, 3 years, has been the execution of that strategy and the fact that the mortgage market hasn't been growing as rapidly. And the same is true on the deposit side, where checking accounts in favor of GICs. Even if you see term deposits. Even if you see that overall deposit balances being flattish, the quality of the revenue and the margin on the revenue has actually been improving.

And so you're seeing that as a driver of the improvement on the margin as well. And so that mix has always got a little bit of customer choice around it as well. So in any given quarter, it's the reason why the guidance that we provide always allows for a little bit of that customer choice to kind of go in the other direction because if mortgages do happen to grow a little faster, we're going to participate in that growth, and you're going to see a little bit of that margin being just from a business mix perspective, eroded away.

And then the final part of it is pricing. And the pricing environment generally stable. The commoditized businesses like term deposits like residential mortgages, notwithstanding. Pricing has generally been a stable -- we're all going to have from time to time or our pricing specials that go on and come off and the rest. But generally speaking, the competitive environment is intense but stable. So layer all that together is where we come up with the -- we think it's going to be flat to gradually higher for the next little while. So we still think there's some opportunity in the margin, perhaps not the opportunity that we've seen in the last couple of years where the margin really has risen quite substantially. But we still think there's some tailwind behind it.

Great. And then just moving on to fee income businesses. Wealth Management segment showed continued momentum in assets under management and administration. Do you expect to continue to take share in this business? And would you consider acquisitions or strategic partnerships to further expand the business?

Yes. The wealth business has been performing well. not just because of the beta component of it. The markets have obviously had a lot to do with it, and we've seen some good growth in assets under management and assets under administration simply because market levels have been rising. Our sales performance is what we're particularly happy with. And that's the -- I come back to the execution of the strategy. And when you look at our Wealth business, you kind of have to think of it beyond just the specific wealth segment because as an example, Imperial Service, which is our -- think of it like a private banking offer for the mass affluent, it's we're the only bank in Canada that has a bit of a distinct channel there. We've empowered it with a digital goal planner. We've empowered it, as I mentioned, with the eCRM and also some AI tools to provide better knowledge and understanding of where the assets are.

But when you come in and do a financial plan with us, the only way to get a constructive financial plan is to tell us everything that you have. And once you tell us everything that you have, then there in lies the opportunity to internalize some of those assets. And we've been seeing it. And mutual fund sales as a percentage of AUM, we've been #1 or #2 in the market for a number of quarters in a row now, and we are -- have every confidence that, that performance should continue not every quarter, depending on the quarter, but that -- it's, again, part of the execution of the strategy.

We've also been backfilling and infilling some of the wealth products or asset management products in which we've been a little bit lighter. So we're not going to be a major ETF player, but it was a bit of a gap in our shelf that we've been filling. Same is true of alternative investments where a bit of a gap in our shelf that we've been filling and that's been helping as well. And so we're adding advisers in the private bank. We're adding advisers in our full-service brokerage. Imperial Service continues to grow, and we think there's still a big opportunity in front of us on the mass affluent.

All of which tells us that the opportunity in wealth management remains significant. One of these that you should expect to hear more about at Investor Day, I probably didn't talk so much as we've resegmented there'll be a specific presentation and targets on wealth management. But it's what you've just heard is the reason we're optimistic that there's a nice growth profile in wealth management. And that's -- that fee revenue, that's ROE enhancing revenue and it helps just generate capital as well. So we're quite excited about the path forward on Wealth Management.

And then on the capital markets business, despite ongoing economic uncertainty, both investment banking and trading have been strong over the course of 2026. Do you expect this trend to continue in the near future?

I mean the capital markets forecasting may be right behind net interest margin forecasting in terms of the number of assumptions that I have to make to be able to get there. It really has been client-focused flow, right? And there's -- our clients have been active. We've been expanding internationally, including here in the U.S. We've been adding people. We've been adding capability in a lot of ways, tied to areas that were strong, right? In Canada, we are all things to all people. As we exit the country and move into some of the other markets, we are cognizant of the fact that there are large scale players and that we have to find an area where we can build a right to win. It doesn't give you the right to win, but it has to at least exist for you to be able to expand into it.

And so when we look at the growth profile that we've been putting up, clearly, the growth has been well in excess of what you'd consider a sustainable rate of growth. But I would say the growth rate has been more cyclical rather than the level to which we gotten in terms of the run rate earnings. We do think there's still opportunity to grow from here. We do still think there's opportunity to get better. The guidance that we gave about the second half of the year was we expected H2, which we're almost completed with H2, but we expected H2 to be down from a very strong H1, but to be up year-on-year from what was actually a very strong H2 last year as well.

When we think about the growth rate going forward, this is a business that we've historically targeted 7% to 10% growth. That doesn't mean we're going to do that every year. And clearly, for the last couple, we've been well in excess of that 7% to 10% range. But when we think about the organic opportunity and the opportunity to grow with our clients, we're still optimistic about the future. The pipeline is looking quite strong. And as we think about 2027, we're still optimistic that there's more to do.

Great. And then kind of moving further down the income statement. After 12 consecutive quarters of positive operating leverage, what levers do you have now to continue generating positive operating leverage? Are you looking to make additional investments? And then where do you think you stand on technology investments compared to kind of competitors?

We've taken advantage over the last number of quarters of a strong revenue environment to accelerate some of the investments that we otherwise would have made. But we never go into a year planning for very strong revenue because if you plan for a very strong revenue and you decide to invest into it, the only thing you know for sure you're going to get is the investments and the spend part. So we start from a planning posture as we enter a year assuming it's going to be a slower revenue environment and feeding it in rather than having to take it back over time, which has allowed us that consistent operating leverage.

I mentioned when we were talking about Investor Day how we do feel like the efficiency story at CIBC is probably underappreciated, and it's probably underappreciated because we haven't talked about it enough. But there's a lot of work going on from an efficiency perspective. We start from the perspective of every one of our businesses, every one of our functional groups is expected to just generate efficiency year-on-year. It's something that we track a couple of percentage points of their operating expenses. It's something that we track, we bake into the plans and we make sure that everyone is delivering.

Beyond -- over and above that, though, when we start to think -- and one of the things that AI has now allowed us to think differently around is really just getting into end-to-end process. And a lot of the efficiency opportunity exists where you would expect it to exist, that intersection between operations and technology and retail front office in the biggest part of our bank, the part of the bank that serves our biggest customer base and the part of our bank that has the highest number of FTE and the highest number of processes. And we're looking at things end to end and looking at things differently, whether it's in our contact centers, whether it's in our residential mortgage, end-to-end processes, whether it's in our front lines and our how we staff and the productivity of our front office.

We're starting to look end-to-end, not starting to -- we are looking end to end, and we'll talk more about how the opportunity in front of us is there. Now when we think about this and the challenge in all of this is, yes, we'll put out some big targets and give you some sense of where we're going to go from an efficiency perspective. But we do have to reinvest in our growth. We're a growth bank. We do still think each of our businesses has growth opportunities in front of them that require investments. And so operating leverage is for us the way to look at this -- the way to look at efficiency. And that we can sustainably generate operating leverage. We're quite proud of a 12-quarter winning streak on operating leverage now.

I almost hate to say 12 quarters because it sounds like we promise it quarterly. We aim for it annually. We've been delivering it quarterly. But part of it is just making sure that we are making the right investments at the right time to be able to generate that revenue growth that will help sustain the operating leverage over time.

So it's a substantial opportunity in front of us. We continue to remain optimistic on the operating leverage front and on the growth front. And they sort of fuel each other, right? Because the more efficiency you can take out of the back and middle office, the more it can power investments in the front office that allows us to spend more time with clients and allows us to continue to grow the franchise.

Great. CIBC highlighted increased digital adoption and productivity gains through its AI platform. How do you plan to leverage this trend to improve operational efficiency and customer experience? And are there any new digital capabilities you expect to roll out in the coming quarters?

We've done a number in the last little while, and there's a lot more to be done. The CIBC AI internal engine that we built ourselves is actually quite powerful and has been rolled out to the entire bank and its adoption rates continue to rise. And when it comes to AI, step 1 really is transforming the culture in terms of the art of the possible and thinking what can you do digital first? What can you do through technology that allows you to become more productive. Again, when you're in growth mode, typically growth mode means adding people. And when we're measuring productivity, we're not looking to remove a whole bunch of staff. We're not looking to dramatically change our FTE count. We are looking to improve productivity per FTE. And so when it comes to , like I mentioned, AdvisorAssist, which really is about helping advisers prepare for meetings, helping with the meeting notes and charting notes. And really, it should allow us to spend if an adviser could do 4 meetings a day with a client, now they should be able to do 5.

And it's not necessarily about harvesting all of this down to the bottom line, it's about getting more of that productivity. It should also mean individuals should be using AI in their own tools. Again, we provided them with the tools to automate the daily tasks, automate the repetitive tasks to allow them to spend more time analyzing, more time advising us. More time advising the businesses that they serve or the clients that they serve. And so we're -- that CIBC AI, the AdvisorAssist, DocuMind is an internally developed document ingestion -- automatic document ingestion. All these little things that become part of an end-to-end solution become part of that efficiency journey that allow our individual employees and individual team members to become more productive and to go off in search of better work to do.

So you're actually improving their jobs, you're improving the quality of their interactions, and we're able to grow more rapidly because they're more productive. So there's a lot being done, a lot more to come.

Great. And then I just want to note, CIBC has delivered solid results driven by steady execution kind of even exceeding your key financial targets of 7% to 10% earnings growth and a 15% ROE. Maybe as we're closing out, I just want to give you the final word any kind of thoughts ahead of Investor Day.

Listen, I will say one of the key things to think about for us is balance, right? We want to be balanced between fee income and net interest income. We want to be balanced between generating efficiencies and investing for the future, right? We want to be balanced in terms of our individual business units. To be sure, as I mentioned, capital markets is having a moment right now. But we want to make sure that we are -- all of our businesses are growing because the balance sheet works best when all of our businesses are growing. Everyone kind of uses resources differently. So that balance has to exist there as well.

And then when we think about ROE versus EPS, it's the same balance that we're after, right? We can continue to push the ROE higher and higher and higher, well, then, by sacrificing growth. But we want to make sure that we're making the right investments, building the right businesses and making it sustainable. So even when we think about our targets and the complementary nature of ROE and EPS growth, it's not one or the other. It has to be an and, which means that balance is important.

And so for us, the results that we put up, we're quite pleased with record year-to-date earnings and strong performance. We still think we're scratching the surface in terms of what our franchise can do. We still think the strategy is the right strategy. We've got the right people, the right technology, the right investments, the right balance sheet and we're just pointing in the right direction. So you should expect from us more of what you've seen in the past, which is that consistent sustainable growth within risk tolerance and in a way that generates a premium ROE and a premium total shareholder return.

Great. We have a couple of minutes left, if there's any questions that people have in the audience? All right. All right. Then please join me. We'll give you a couple of minutes back. Please join me in thanking Rob for his presentation today.

Thanks, everyone. Appreciate it. Thanks, Brian.

Good morning. Welcome to the CIBC Q3 Quarterly Results Conference Call. Please be advised that this call is being recorded.

I would now like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations and Performance Measurement. Please go ahead, Geoff.

Thank you, and good morning, everyone. We will begin this morning's call with opening remarks from Harry Culham, our President and Chief Executive Officer; followed by Rob Sedran, our Chief Financial Officer; and Frank Guse, our Chief Risk Officer. Also on the call today are a number of our executives, including Christian Exshaw, Capital Markets; Kevin Li, U.S. Region; Hratch Panossian, Personal and Business Bank in Canada; Susan Rimmer, Commercial Banking; and Eric Belanger, Wealth Management. They are available to take questions following the prepared remarks.

As noted on Slide 1 of our investor presentation, our comments may contain forward-looking statements, which involve assumptions and have inherent risks and uncertainties. Actual results may differ materially. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. Management measures performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance.

With that, I would like to turn the call over to Harry.

Thank you, Geoff, and good morning, everyone. Today, we announced strong third quarter results, underscoring disciplined execution against a clear strategy. The connectivity of our platform and deep client relationships are translating into high-quality earnings and broad-based growth. We believe we have meaningful runway ahead to continue to drive outperformance from our purpose-built franchise.

I'll start with an overview of our adjusted quarter 3 results and then share highlights of progress against our strategy this quarter. We reported earnings per share of $2.73, a 26% increase from the prior year, marking the ninth consecutive quarter of double-digit earnings per share growth. Revenues of $8 billion were up 15% from the prior year, reflecting broad-based momentum across each of our businesses. Expenses were up 11% from the prior year, marking our 12th consecutive quarter of positive operating leverage. Pre-provision pretax earnings rose 20% to $4 billion, while our efficiency ratio improved by 200 basis points from the prior year.

We remain confident in the strength of our credit portfolios, and we continue to stay close to our clients. We recognize that rising trade and geopolitical tensions are having real consequences on the economy. The developments over the past week are a reminder that the path forward will not be linear, and we plan for a range of outcomes. Through periods like this, our clients can count on CIBC for timely advice and practical solutions to help them navigate what lies ahead. We have built a diversified franchise to weather uncertainty.

With that, our balance sheet is a source of strength and continues to provide meaningful flexibility. We ended the quarter with a CET1 ratio of 13.4% after repurchasing 7.5 million shares and delivered a return on equity of 16.8%, which is up 260 basis points from a year ago. That combination speaks to the underlying durability of our franchise and our disciplined approach to capital deployment. That same strength in capital, liquidity and funding is what enables us to stand alongside our clients through periods of uncertainty and periods of opportunity.

Canada's renewed focus on sovereignty and economic resiliency is creating one of the most significant capital mobilization efforts and opportunities our country has seen in decades. The implementation of Canada's defense industrial strategy represents a substantial opportunity for our commercial clients.

Earlier this quarter, we hosted our inaugural Defense and Resiliency Summit at our headquarters here in Toronto, bringing together senior government leaders, investors and clients from across the ecosystem. This summit reflects how CIBC leverages our convening power and sector expertise to help clients and key leaders navigate complex, rapidly emerging opportunities, and we intend to be the bank our clients turn to as these investments mobilize.

Let me now turn to an update on our strategy. We have been clear on the 4 priorities shaping how we allocate capital, invest in our franchise and position our bank for durable growth. This quarter, we saw progress across each of them. Our first strategic priority is to grow our mass affluent and private wealth franchise. We continue to differentiate through high-touch personalized device, a broad wealth platform and product innovation velocity.

In our managed mass affluent offering, our client base grew by 4%, supporting money and balance growth of 12% from the prior year. That combination underpins our momentum in scaling long-term growth with mass affluent clients.

This quarter, CIBC Private Wealth was named Best Alternative Asset Manager by family wealth report. That recognition speaks to the depth of our wealth franchise and our ability to bring differentiated capabilities to high net worth clients.

Our second strategic priority is to expand our digital first personal banking capabilities. Technology is not only equipping our advisers with greater capacity to serve clients more effectively but also giving clients more control and personalization. Our momentum is evident in Investor's Edge, our self-directed investing platform. This year, we achieved 34% year-over-year growth in new account openings as Canadians are choosing CIBC as their digital investing partner of choice. That trust is translating into scale with AUA on Investor's Edge up 27% from the prior year. Together, these results tell a clear story. Our investments in digital capabilities are resonating with our clients.

We also expanded our reach with skilled trades professionals across Canada through a new collaboration with Taskrabbit, which includes tailored banking offers financial literacy resources and advice. This is a strong example of how we are building relationships earlier, serving clients in growing segments and supporting them as their personal and business needs evolve.

Our third strategic priority is to deliver connectivity and differentiation to our clients. This remains a defining strength of our culture and is contributing to stronger performance across our bank. In our Canadian Commercial Banking business, 95% of our lending clients also maintained a deposit relationship with our bank. We prioritize clients who bank and bore with us because it gives us a clearer understanding of their business and ambitions, enabling us to deliver the tailored advice that sets us apart. That same client-focused execution across the enterprise is also being recognized externally.

During the quarter, CIBC Capital Markets was named Canada's Best Investment Bank for financing solutions at the Euromoney Awards for Excellence 2026, while Global Finance recognized CIBC as the Best Overall Cash Management Bank in Canada for 2026. Together, these distinctions reinforce the strength of our capabilities and the differentiated value we continue to deliver for clients across our platform.

Our fourth strategic priority is to enable, simplify and protect our bank. AI is helping us execute faster, strengthen operational excellence and compete from a position of strength. We are scaling governed repeatable capabilities that enhance client experience, improve colleague efficiency and support risk management. This quarter, CIBC received 2 digital banker awards for AI innovation and digital transformation, strong external validation of our approach and the progress we are making. We also announced 2 important proprietary AI advancements.

First, we introduced CIBC AI 2.0, the first enterprise-wide agentic AI workspace in Canadian banking. This enables team members to delegate complex multistep tasks to an AI agent so they can focus more time on strategic work and client relationships.

Second, we launched CIBC Advisor Assist, an AI-enabled platform that helps advisers spend more time with clients. The system automates meeting notes, summaries and [ flip ] documentation while supporting regulatory compliance, and this reduces administrative time for advisers by up to 50%. Together, these solutions demonstrate how we are actively innovating and deploying AI in practical, governed and scalable ways to improve client experience and increase employee efficiency.

The progress across all 4 of our strategic priorities and momentum we are experiencing reinforces our confidence in our approach, the strength of our franchise and the meaningful runway of opportunities ahead. Against that backdrop, I'm pleased to announce that we will host our next Investor Day on December 9. This will be an opportunity to take investors and analysts deeper into our strategy, the strength of our business mix and the priority is driving durable growth and long-term value creation across our platform, and we look forward to sharing how we are positioning CIBC to win over the long term.

Looking ahead, we approach the balance of fiscal 2026 with measured confidence. The trade environment will continue to evolve, and we are not going to speculate on where it lands. What we can control is how we show up for our clients and how we run our bank with excellence. Regardless of the environment, our playbook does not change. We stay close to our clients, we maintain credit discipline, we invest strategically in our platform, and we effectively deploy capital to support both profitable growth and shareholder returns. That consistency matters through the cycle. It's the way we operated the Bank of Commerce and it's how we will continue creating value for our stakeholders.

And with that, I'll now turn it over to Rob for a review of our financials. Over to you, Rob.

Thank you, Harry, and good morning, everyone. So let's start with 3 takeaways. First, we delivered another strong quarter led by balanced revenue growth and positive operating leverage driven by the focused execution of our strategy. Second, healthy client activity and engagement continues to drive solid loan and deposit growth across our bank despite an unsettled macroeconomic environment. And third, our client businesses are supported by both excess capital and liquidity while delivering premium returns and enabling capital return to shareholders.

Please turn to Slide 7. For the third quarter of 2026, we reported earnings per share of $2.47, which included the previously announced albeit smaller charge related to our Caribbean operations of $232 million after tax that was treated as an item of note in our Corporate and Other business unit. On an adjusted basis, EPS was $2.73, up 26% from a year ago. Adjusted ROE was 16.8%, up 260 basis points from the same quarter last year.

Let's move on to a detailed review of our performance. I'm on Slide 8. Adjusted net income increased to $2.6 billion and pre-provision earnings reached $4 billion in Q3. Revenues were up 15% with broad-based momentum benefiting from balance sheet growth, improving net interest margins, higher fee-based revenues and robust trading. The loan loss provisions were modestly higher, our strong and building earnings power allowed us to earn through them and report a 26% increase in adjusted net income. Frank will address credit in his remarks.

Please turn to Slide 9. Excluding trading, net interest income was up 14%, supported by continued balance sheet growth and expanding margins. All bank margin ex trading increased 13 basis points year-over-year and 2 basis points sequentially. In Canadian P&C, NIM was 304 basis points, up 3 basis points sequentially due to higher loan and deposit margins driven by the continued execution of our client-focused strategy.

In the U.S. segment, NIM was 376 basis points, down 14 basis points from the prior quarter, primarily reflecting business mix as loan growth outpaced deposit growth along with lower product margins. Despite this, net interest income increased 9% in that segment, supported by strong growth in our client business on both sides of the balance sheet. At the total bank level, we reiterate our expectation of a stable to gradual positive bias on our net interest margin over time.

Slide 10 highlights the revenue trends. Noninterest income was $3.9 billion, up 20%, supported by constructive markets and strong trading. Market-related fees were up 25%, driven by particularly strong growth in investment management, custodial and mutual fund fees. Transaction fees increased 6%, mainly reflecting a 25% increase in credit fees supported by strong client activity in our corporate lending and financing businesses.

Slide 11 highlights our expense performance. Expenses were up 11%, driven by revenue-linked compensation, increased business activity and continued investments in our franchise, our brand, our people and technology, including AI-enabled productivity across our bank. Looking forward, we expect adjusted noninterest expenses to be up quarter-over-quarter in Q4.

Slide 12 highlights the consistent strength of our balance sheet. Our CET1 ratio at the end of the quarter was 13.4%, down 19 basis points from the prior quarter as the strong organic capital generation was offset by the charge related to the Caribbean, the closing of a minority stake in &Partners that we announced last quarter and share repurchases. This quarter, we bought back 7.5 million shares. Our liquidity coverage ratio averaged 127% this quarter.

Starting on Slide 13, with Canadian Personal and Business Banking, we highlight our strategic business unit results. Adjusted net income growth of 17% and pre-provision earnings growth of 10% were driven by strong revenue growth. Revenues were up 9% year-over-year, supported by 25 basis points of net interest margin expansion and loan growth, tangible results from our focus on deep and profitable client relationships. Expenses were up 8%, mainly due to higher investment in technology and other strategic initiatives as well as higher employee-related costs.

On Slide 14, we show Canadian Commercial Banking and Wealth Management where net income and pre-provision pretax earnings were up 4% and 18%, respectively, from a year ago. Revenues were up 18% from last year. Commercial Banking revenues were up 11%, driven by higher margins and volume growth. Commercial loan and deposit volumes were up 7% and 8%, respectively, from a year ago. Strong Wealth Management revenue growth of 23% was driven by higher average fee-based assets and increased client activity driving higher commissions. AUA and AUM were both up over 20% compared with the year ago quarter.

CIBC Asset Management was ranked second among the big 6 banks and year-to-date retail mutual fund long-term net sales and first in long-term net sales as a percentage of AUM. Expenses also increased 18% from a year ago due to higher performance-based and employee-related compensation and higher investments in strategic initiatives.

Turning to U.S. Commercial Banking and Wealth Management on Slide 15. Net income increased 22% from a 10% increase in pre-provision pretax earnings and lower loan loss provisions. Revenues were up 7% from last year, driven by loan and deposit volume growth and continued broad-based fee income growth. Expenses were up 6% due to higher employee compensation.

Turning to Slide 16 and our Capital Markets segment. Net income was up 34% from the same quarter last year and revenues were up 22%. Global Markets revenue was supported by strong equity trading and financing activity. Corporate and Transaction Banking revenues were up, driven by volume growth and higher fees. These were partially offset by lower advisory and equity underwriting activity and investment banking. Expenses were up 19% as we continue to invest for long-term growth. Employee-related and performance-based compensation also contributed to the higher costs.

Slide 17 reflects the results of Corporate and Other, which was a net gain of $32 million compared with a net loss of $107 million in the prior year.

So in closing, our results this quarter reflect the combination of a relentless focus on our clients, disciplined execution and investments we're making to build for the future, and they reinforce our confidence in the long-term earnings power and profitability of our bank.

With that, I'll turn it over to Frank.

Thank you, Rob, and good morning. Overall, our credit performance remained resilient this quarter even as the macro backdrop continues to evolve. Our broader credit fundamentals are performing within the range we would expect in this environment, supported by our strong allowance levels. We have built additional reserves for tariff-related risks through expert credit judgment overlay since the beginning of fiscal '25 and continue to build our allowance this quarter. Our most sensitive business lending exposures to the tariff impacts represent less than 1% of the bank's total loan portfolio. We've also run a variety of stress testing on the portfolios to ensure we remain well prepared for a range of outcomes. Our impaired losses were elevated this quarter as a result of a few specific events in the Canadian Commercial Bank and Capital Markets portfolio. The strength of our total portfolio continues to position us well to manage through ongoing macroeconomic uncertainty, supported by diversified portfolios, prudent reserves and proactive client outreach.

Turning to Slide 20. Our total provision for credit losses was $564 million in Q3 compared with $605 million last quarter. From a performing perspective, we continue to build our allowance in our Canadian consumer and commercial banking portfolios to maintain the meaningful buffer we have against the current macroeconomic headwinds. These increases were offset by releases in the performing allowance of our U.S. and capital markets businesses, mainly driven by the sale of a portfolio of U.S. commercial real estate loans as well as accounts migrations. Overall, our performing allowance declined by $48 million this quarter.

Our provision on impaired loans was $612 million, up $64 million quarter-over-quarter, mainly driven by higher provisions in our Canadian Commercial Banking and Capital Markets portfolios. We ended the quarter with allowance coverage of 81 basis points, up from 80 basis points last quarter, which reflects our disciplined approach to maintaining reserves through the cycle.

Turning to Slide 21. We've highlighted impaired trends across our business units. In Canadian Personal and Business Banking, impaired provisions were down this quarter. The impairments in Canadian Commercial Banking were limited to a small number of files and are not reflective of a broader trend. We continue to remain comfortable with the overall performance of our Canadian commercial book, which remains well diversified.

While impaired provisions in capital markets were up, this was largely driven by one new impairment this quarter and a top-up on a previously impaired loan. The overall credit risk portfolio -- sorry, the overall credit risk profile of this portfolio remains stable and well managed. In U.S. Commercial Banking, performance remained strong this quarter with lower impaired losses reported.

At the bank level, impaired losses are 37 basis points year-to-date as the losses remain consistent with the elevated stress in the macroeconomic cycle. We expect impaired losses in and around this range for the remainder of the year. We remain confident in the underlying credit quality of the portfolio.

Slide 22 summarizes our gross impaired loans and formations. Our gross impaired loan ratio was 65 basis points, down 1 basis point quarter-over-quarter. New formations were up in Q3, reflecting an increase mainly in business and government and mortgages. While mortgages continue to experience an increase in impairments this quarter, we do not expect a material increase in losses given the prudent loan-to-value ratio of our uninsured mortgage book, which also has low historical net write-off rates.

Slide 23 outlines the 90-plus day delinquency rates and net write-offs of our Canadian consumer portfolios. While unemployment has begun to show signs of improvement, a slower housing market remains a source of pressure on some household cash flows, which is reflected in the higher residential mortgage delinquency trends. Actual mortgage losses remain very low and continue to track in line with historical performance. We did see improved performance in credit card delinquencies sequentially this quarter.

Personal lending delinquencies also improved and our overall Canadian consumer net write-off ratio declined from last quarter. So while consumer stress is higher than it was a year ago, the portfolio performance remains consistent with the environment and well within our expectations.

In closing, our credit portfolios continued to perform within the range we would expect despite ongoing macroeconomic pressure. Our reserves remain sound, and our teams are working closely with our clients actively managing exposures and maintaining a disciplined approach to credit risk.

Overall, we remain confident in the quality of our portfolio and are focused on managing it closely through the uncertainty that remains ahead. And I will now ask the operator to open the line as we welcome your questions.

[Operator Instructions] Our first question comes from Ebrahim Poonawala from Bank of America Merrill Lynch.

The first question, I guess, if we can talk about just Canadian Personal and Business Banking. What's striking to me when we look at sort of from a year-over-year standpoint, there's been very little in terms of loan and deposit growth. Fees have been strong. You had operating leverage. Just talk to us when we think about that segment.

Looking forward, what do you see as the drivers of growth if you were to repeat high single digits or even low double-digit kind of net income growth from here into next year, understanding all the tariff-related uncertainty, which who knows when we get clarity on. But if you could start there, it would be helpful.

Ebrahim, it's Hratch. Nice to hear from you. So happy to take that question, and I'll keep this brief because we'll have more opportunity as we get into Q4 and Investor Day to talk about longer-term outlook. But I think the key answer to your question is we've got a good strategy. We're executing it, and you're seeing the results as a basis of that.

As a reminder, our goal overall in the personal bank and the business bank is to continue gaining share in the areas we want to gain share in the products where we can add value for our clients and create profitability. And by doing that, continue to outperform market in terms of revenue growth, overall profitability and growth in net income. And I think we're doing all of that. I look at the results again this quarter. We continue to have best-in-class revenue growth. We [indiscernible] in that high single digit to low double digits for the last couple of years on a quarterly basis.

And while things are slowing down a bit in market, we continue to outperform on revenue growth, and I think we can continue to do that. We continue to manage the expenses prudently, continue to have operating leverage. I think we've had positive operating leverage 12 out of the last 13 quarters. And again, we will continue to manage the business so that we can deliver that. And if you do those 2 things, you continue to see the increase in profitability and the net income trajectory.

What's driving that? And why are we getting that despite the balance sheet being a bit slower is the strategy. As we said before, number one, we're trying to win an everyday banking with all Canadians. We're doing that. We grew our demand deposits mid-single digits, while we've seen some outflows about 10% year-over-year in GIC. So our deposit number overall has been down 1%. The profitability and the core relationship value it does represent is actually increasing, and we're gaining share again in those everyday deposits. We're gaining share in credit cards, and we're growing in that mid-single-digit range. We're being more careful on mortgages and the margins on the mortgages.

We're also winning in the mass affluent space. We've said in addition to everyday banking for all Canadians, we want to be the bank of choice for those Canadians that have some wealth and prefer to work with an adviser. We've been trying to double the size of that business over the next 5 years. And this year, we've increased 10% in terms of number of clients we've added to that platform. And we continue to see 50% to 60% improvement in funds managed with the bank as those clients get in there. About 3/4 of them are getting a solid investment plan done. And based on that plan, they're consolidating more assets with us. And so all of that will continue and all of that show to drive outperformance to market. We'll talk more about what we expect out of market and specific numbers on guidance in Q4.

Got it. And I guess maybe one for you, Frank. Last quarter, we saw some credit increase on -- in consumer unsecured. We've seen -- you talked about the commercial and a couple of files there. Just summarize for us your view on credit outlook. I think -- start of the year itself like we would see improvement, back half of the year with some plateauing in PCLs. Do you feel good about that, not just based on what you see today?

Yes. And of course, there is a lot of uncertainty and some fluidity in the environment right now. But as I said in the prepared remarks, we do feel good about the credit outlook. We do feel very good about the resilience of the portfolios. And a lot of what we are seeing in the results, I would call in line with expectations against the macroeconomic backdrop. And now you've mentioned on the consumer side, and we have seen sequential improvement there quarter-over-quarter. There is always some seasonality in those numbers. So that is certainly a driver. But we've also seen unemployment coming down a little bit. And of course, that is helping the consumer base as well.

From an outlook perspective, on the consumer side, I would say unemployment will be a main driver, and that's what we are watching closely even from an economic outlook perspective. And then switching a little bit to the commercial side. As you heard, we have seen a little bit higher losses in our Canadian commercial portfolio. But those are very isolated to a few specific events, and we are working on those events, but they don't give us any concern for a broad-based portfolio deterioration. And to a certain extent, we do not expect them to reoccur.

Our next question comes from Matthew Lee from Canaccord Genuity.

On the capital market side, really nice growth there. Just how much of that improvement that you've been seeing is kind of structural versus cyclical? And is there another leg of growth that you can achieve without materially increasing the capital allocated to that business? And then kind of on a broader question, like what do you see as the floor of that business, just given the cyclicality that we know exists there?

Matthew, it's Christian. We've had, I would say, 3 quarters of exceptional constructive markets. And the business that we built at CIBC is very well diversified. It is, let's say, the results of that client-led strategy that we've had for nearly, I would say, 20 years. So in terms of answering the question, everything really, when you look at our financials is centered around our clients and very difficult for us, obviously, to speculate on what the environment will be.

What I can tell you, though, is that whenever the markets are constructive, we do capture a lot of that upside. Look at the PPPT growth over the last 7 quarters. We've invested heavily in people. So year-to-date, for instance, we've hired 250 people. Roughly half of that is in the U.S., 40% of that is in Canada. We continue building product suites that fits our clients, for instance, in the AI space, whether it's around project finance, infrastructure and energy. We continue to invest in the overall infrastructure of our business and technology. That's one of our big differentiators, if you think of our ASG business, if you think about our Canadian depository business, both business are fee-based businesses and very much, I would say, foundational to what it is we do and kind of like neutral to what the environment would be.

We do see, I would say, as we've said in the past, continued growth in our business. We look at high single growth of our earnings through the cycle. And when I look at Q4, I would tell you that year-over-year, we do expect some growth, but some moderation quarter-over-quarter given the uncertainties in the macro side.

Our next question comes from Gabriel Dechaine from National Bank Financial.

I want to drill down into the margin discussion a little bit. And Rob, I think you said this reiterated stable to positive all-bank NIM outlook. Is that for Canadian Banking as well?

Gabe, it's Rob. So yes, listen, generally speaking, the all-bank margin and the Canadian [ PMV ] margin tend to move in the same direction. And so yes, it is an expectation of same in Canada, and you heard Hratch's initial answer to an earlier question, get into a lot of the reasons why we're comfortable with that.

We do see the hedging strategy continue to play, it's the tractoring strategy continue to play out and add a bit of a tailwind. And over time, we think product mix and strategy is going to continue to be constructive there as well. So stable to gradually higher, and we remain comfortable with that at the all-bank level.

Okay. So the securities, reinvestment rates, there's still a tailwind in Canada. I guess, looking at Canada and the U.S., I see Canada, the loan growth is still positive and deposit growth has been kind of flat to down a bit for the last 4, 5 quarters. And just wondering if you expect a turnaround there? Or does deposit growth dynamic? Is that going to remain unfavorable and maybe present more of a challenge going forward?

And then in the U.S. the double-digit compression we saw this quarter, your flow chart, which is very helpful. It highlights pricing as the issue. Is that just the deposits are getting more expensive because you're running more of a 100% loans-to-deposits ratio there? And I guess if you can give some outlook commentary for the U.S. as well, that would be great.

Gabe, it's Hratch. I'll take the first part around the U.S. -- the Canadian margin, and then I'll pass on for the U.S. margin. So listen, I covered some of this in the earlier question. We continue to apply our strategy, and our strategy is to serve client needs. You've got to look at deposits a bit in 2 halves. You've got the everyday banking deposits and those are more everyday needs for clients. And there, all of our data shows that we continue to gain share in terms of new account opens as well as in the balances, and we're focused on that.

When you look at the GICs, which is where the runoff has been, as I said earlier, the GICs were down about 10% year-over-year. First, we've actually done well relative to the industry, which is why you're seeing, again, our overall deposit number, while it is down 1% year-over-year. It actually compares well to everything that was reported this quarter. But also -- and this is the important part. The GIC is an investment product for clients. And so our goal there is to work with clients as GICs are coming up to maturity, understand what their needs are and put it in the right product. We've actually been leading the tables in terms of our growth in mutual funds. And a lot of those GIC funds have actually been going by client preference and because of the advice we give them into the investment side with managed money. And so overall, the vast majority of the GIC outflows, we do see us retaining those funds. And when we can retain those funds in a product that's better for our clients and their choice, it also works better for the economics of the bank. That's a win-win.

All right. Great. I missed some of that, distracted, but that's a lot clearer. Now the U.S.?

Yes. So Gabe, it's Rob. Maybe I'll start and then hand it to Kevin. You have to remember in the U.S., we're almost exclusively a commercial bank. And so there is some seasonality in deposit flows. We've called it out before. Q4 and Q1 tends to see deposit inflows. Q2 and Q3, a lot of those deposits get deployed. So the margin tends to have a bit of seasonality to it. And I'd say roughly half the margin in the U.S. decline this quarter, quarter-on-quarter relates to just loans growing faster than deposits, which is more or less as we've guided to in the past. I think the other half of the margin is a bit more of the business factors underlying it. Maybe for that, I'll pass it to Kevin to give you some color.

Yes. Thanks, Rob, and thanks, Gabe, for the question. And just for a bit of historical context, right? We were [ 378 ] in 2025 and [ 349 ] in 2024. But just to go into a little bit more detail about the 14 basis point decline, kind of building on what Rob said, about half of that is mix driven. About half of it is pricing compression.

On the mix, it's very strong loan growth. It's $1.5 billion or about 3.5% sequentially, loans outpacing deposit growth, which was about flat. And we do expect to see a seasonal reversion there in the coming quarters as we saw last year.

On pricing, I guess, I'd say 2 things. As you've seen from a lot of our peers in the U.S. and in Canada, yes, it's competitive for high-quality borrowers. That's for sure. But I think it's really important to note, about half of the difference in pricing actually relates to client situations where credit profile is improving. So loans are getting repriced downward based on moving down the price grid, which implies improving credit quality. And look, over all, the way we think about it, it's really how are you going to balance the NIM trajectory and loan growth with the ultimate goal of improving NII and revenues and overall return have all within our risk appetite, and we feel very pleased with where all those metrics came in, in the U.S. for the quarter.

Our next question comes from Mario Mendonca from TD Securities.

First, Harry, you spent a little extra time in your opening comments talking about CIBC and implementing Agentic AI. And as I listen to that and listen to you describe all these complex processes that can be automated, it immediately made me think about what your strategy is around headcount. Do you view AI as an opportunity to take CIBC's head count lower over the next, say, 5 years? Or is it more a scenario where the revenue growth can remain strong while you keep head count relatively stable? Which of those two is most likely?

Well, let me just take a quick step back, Mario, and thank you for that really important question because we actually have AI in production and at enterprise scale. And I was trying to get that across in my prepared remarks and this latest implementation, and we've been at this for a long time, is really the first enterprise-wide agentic AI workspace for Canadian banking, but for us, and it's not a chatbot. It's a coworker. So it makes us much more productive.

So when we look forward -- and by the way, we're using it all over the entire organization, and we've got thousands and thousands of people being educated. And in fact, our Board is actually engaged as well as our -- all of our leadership. And we're seeing this across the wealth, commercial, capital markets and personal banking space. So it's not -- these are not siloed experiments. These things are happening and helping productivity. So it's really about growth. It's about productivity. It's about risk management using AI and creating long-term franchise value.

And so what that means from an efficiency perspective, it's all part of our modernization journey, and we're going to talk to you a lot more about that at our Investor Day in December. But what I would say, to answer your question, we actually see head count growth over the next 5 years in the organization and when we look forward, but we see significant productivity increase to take our results to the next level and drive out performance. So it's a tale of 2 things. We are going to invest in people and we're going to invest heavily in technology.

Okay. That's clear. I want to move on to a different question, and this is something that myself and I think others have addressed in the past, and it's the exceptional growth in the wholesale lending platform, $23 billion in new wholesale loans in the last 2 years. And as I look through the supplement, I can see where it's coming from. It looks like it's leveraged to the U.S. It's in financial institutions, business services, commercial real estate. And again, it seems like it's U.S.

So the first question is, to what extent is this wholesale lending growth really in support of the broader capital markets business. By that, I mean growing underwriting and advisory -- growing the underwriting and advisory business, that's the first part. Is this really necessary to drive the other source of revenue growth?

And then for Frank, the rule of thumb I've used in the past for when I see growth at this level is to sort of look forward 2 years and say, in 2 years, they're going to pay some kind of price, but it doesn't have to be a bad price, but they're going to pay some kind of price on the credit front. Is it your view -- is that rule of thumb, 2 years, is an appropriate rule of thumb to use? So those are the 2 questions on wholesale.

Mario, thank you for the question. It's Christian. So you're right. If you see the loan growth year-over-year, it's up roughly 17%. I would also ask you to focus on deposits. Deposits during that same period of time have grown by 32%. The reason I'm looking at both as we look at the balance sheet. I do look, obviously, when I look at the -- when we look at the business, it's our client-focused business. We look at also -- we look at it from a lens of risk, and we want to make sure that everything in the books is balanced.

At the end of last year, we announced the creation of payments, which was a merger of our transaction business and our ASG payments business. And that has been, I would say, amazing. It has really helped us to focus on our clients. I'll give you an example. We focus on our top 100 clients to look at the market share of deposits about $100 million. And we didn't have that great market share. And that number now is well over, I would say, 20%. So we're very happy in terms of the growth on the deposit side.

Coming back to your question around the loans, it really is around -- when you look at what it is we're building in the U.S., we're very, very focused on building what I call digital infrastructure. And when you think about digital infrastructure, it's an entire ecosystem. It's an ecosystem from -- if you think about data centers, you're thinking about industrials, you're thinking about the [indiscernible] because you've got to finance this. That includes, I would say, private credit. You've got to think about energy, whether it's renewables or traditional. That also then links back to what we do in global markets, which is power trading or crude or nat gas trading, for instance, and renewables, where we're a top 5 in the U.S.

So is it foundational to what it is we're building in the U.S.? Absolutely. Is it something that we're building on a stand-alone basis just for revenues? No, not at all. If you think about when we bring in those loans, they attract deal concern hedges, they bring in swaps. They bring in bond takeouts. There's a lot of ancillary business, and it helps us really, I would say, build this client business that we're building in the U.S. And I hope this answered the question. Frank?

It just sounds like it's integrated throughout the organization. And Frank?

Yes. Sorry, I'll jump in here as well. So reiterating a little bit what Christian said, that is very well risk-controlled originations. It's actually high-quality businesses. We do look at risk ratings of those underlying counterparts, and those are exceptionally strong.

You asked a little bit about the rule of thumb. I think the rule of thumb of about 2 years as it relates to maturing of some of those originations is right. I would say it's probably a bit longer on the business and government side, maybe a little bit shorter on the cards portfolios, but in and around that 2-year range.

But we are working very closely with the businesses. We do understand those businesses that we are originating in very, very well. And we are not compromising from a risk quality perspective. So what that doesn't give me is any concerns that we will see a deterioration in the rates, yes. But you're right. On a larger portfolio, we may see larger loan losses coming up. But I expect the rates essentially to be very consistent with past experiences.

That having said, those portfolios can be a little bit lumpy. But while you will see it in 2 or 3 years from now, we watch very, very closely ongoing migrations and so on, and we have no concerns with those underlying books as to what we are seeing so far.

Our last question comes from Doug Young from Desjardins Capital Markets.

Frank, maybe I'll keep this quick. But impaired PCL rates slightly above the guidance range you gave earlier this year. It sounds like you're going to be slightly above that for fiscal '26. Just curious like when you look back, like what different versus maybe what you expected?

And then second part is, are we in a period where maybe impaired PCLs continue to go up or deteriorate a little bit, but you are in that range or you're in that pivot point where you start to release PCL as the economic outlook maybe slightly improved? You talked about unemployment improving. I'm just wondering if we're in that period where the market and we should start to expect steady releases on the performing loan side?

Thank you for the question, Doug. And impaired losses are certainly a little bit above the range that we anticipated at the start of the year, at least in our base case. But our base case didn't necessarily include a very prolonged trade war. It didn't include the Middle Eastern conflict and some of the oil price shocks we would have seen in between.

So when I look more outside of the base case into some of our downside cases, it is certainly well within the range of what we were expecting. If I then go a little bit deeper into some of the drivers and look at some of the very idiosyncratic events that we've seen in our Canadian commercial business, it does give me some good comfort on our guidance range.

Now it's still a little bit too early to give you '27 guidance, and we will have to absorb a little bit of the evolving environment over the past week as well into our guidance, but we'll certainly come back in Q4 with what we see in 2027. As I said before, unemployment will be a big driver. And if the unemployment in Canada continues to trend down, we shouldn't see impaired losses continue to trend down.

And then again, from a releases perspective, yes, we should expect releases at some point once forward-looking indicators trend better. But what that will have to be triggered by is a lot more clarity. And the volatility and uncertainty out there currently doesn't give us that clarity yet. So there will be a lot of uncertainty on a go-forward basis. But once that goes away, there should be and could be ongoing releases for sure.

Well, the release we saw this quarter wasn't indicative of the fact that we hit that to this point.

No, sorry, I should have commented on that a little bit as well. Actually, if you distill that a little bit, our release this quarter is actually a build in our Canadian businesses. It is a build driven by a lot of that uncertainty that we still continue to see. And the releases that we saw in our U.S. business and in our capital markets business is actually largely driven by the sale of a CRE portfolio that I talked about and some portfolio migration that we saw in those businesses. So again, not driven by the economic outlook, are much more driven by those 2 specific events.

Thank you. I would now like to turn the meeting over to Harry.

Thank you, operator, and thank you all for joining us this morning. Before we close, I'd like to thank the entire CIBC team for their dedication to serving our clients, our shareholders and the communities in which we operate, and each other, of course.

Coming up on October 4 is the Canadian Cancer Society CIBC Run for the Cure, marking CIBC's 30th year as the title partner. It's an event I personally look forward to each year and one that reflects the power of coming together in support of those affected by breast cancer. I hope to see many of you there.

Thank you again for joining us today and for your continued interest in CIBC.

This concludes today's conference call. You may now disconnect.

Good morning. Welcome to the CIBC Q2 Quarterly Results Conference Call. Please be advised that this call is being recorded.

I would now like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations. Please go ahead, Geoff.

Thank you, and good morning. We will begin this morning's call with opening remarks from Harry Culham, our President and Chief Executive Officer; followed by Rob Sedran, our Chief Financial Officer; and Frank Guse, our Chief Risk Officer. Also on the call today are a number of our group heads, including Christian Exshaw, Capital Markets; Kevin Lee, U.S. region; Hratch Panossian, Personal and Business Bank in Canada; and Susan Rimmer, Commercial Banking and Wealth Management, Canada. They're all available to take questions following the prepared remarks. As we have a hard stop at 8:30, we ask that you please limit your questions to one.

As noted on Slide 1 of our investor presentation, our comments may contain forward-looking statements, which involve assumptions and have inherent risks and uncertainties. Actual results may differ materially. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. Management measures performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance.

With that, I will now turn the call over to Harry.

Thank you, Geoff, and good morning, everyone. We reported strong second quarter results this morning that demonstrate the consistent execution of our client-focused strategy and the compounding power of our diversified platform. I will provide an overview of our adjusted quarter 2 results, followed by an update on our strategic progress. I'll also touch on some announcements we made today aimed at strengthening our platform for growth moving forward.

We reported earnings per share of $2.54 for quarter 2, a 24% increase from the prior year, marking the eighth consecutive quarter of double-digit earnings per share growth. Revenues of $8 billion were up 14% from the prior year, including double-digit growth across each of our businesses. Expenses were up 10% from the prior year, and operating leverage was 4%, marking the 11th consecutive quarter in which we've delivered positive operating leverage. Provision for credit losses were largely in line with our expectations for this stage of the economic cycle. While our outlook assumes some of the energy price and inflation pressures to be unwound over the balance of the year, potential disruptions from geopolitical and trade tensions remain.

Importantly, we are staying close to our clients as they navigate this backdrop, and we remain comfortable with the overall credit quality of our portfolios. Our strong capital position provides us with a solid foundation to navigate the current environment with confidence. We ended the quarter with a robust 13.6% CET1 ratio, even after repurchasing 6.5 million common shares. With this elevated capital, we delivered a return on equity of 16.4%, up 250 basis points from the prior year.

I'll now share some key highlights from each of our 4 strategic priorities, which demonstrate the progress and momentum we're seeing across our bank. Our first strategic priority is to grow our mass affluent and private wealth franchise. By delivering personalized high-touch service, we continue to differentiate ourselves and build lasting relationships that drive value for our clients. In this quarter, we continued to grow the number of qualified clients within our managed offering and drive higher money in balances. We also ranked in the top 2 for retail mutual fund long-term net sales among the big 6 Canadian banks. In our Private Wealth segment, our leadership continues to be recognized by the industry this quarter, we were honored to receive awards for Best Private Bank in Canada and best multifamily office in the U.S.

Our second strategic priority is to expand our digital first personal banking capabilities. Our focus remains on making banking more convenient, accessible and personalized through technology. We are delivering on that commitment with new Amazon and Skip partnerships announced this quarter, which give clients more value from their relationship with our bank. Our momentum extends to our online brokerage platform as well. At CIBC's Investor's Edge, new account openings increased by 9% compared to last year, reflecting the growing demand for flexible do-yourself investment options. Our third strategic priority is to deliver connectivity and differentiation to our clients. Our highly connected approach is deeply embedded across the CIBC network is a defining element of our culture.

By fostering strong collaboration and integration across our teams, we are delivering solutions that meet the evolving needs of our clients. This drives strong results across our businesses, particularly in capital markets, commercial banking and wealth management. As a proof point, 58% of our private banking clients have Wood Gundy or investment council relationship, a number that continues to rise. And our fourth strategic priority is to enable, simplify and protect our bank. Here, we are leveraging AI as an accelerant to help us execute faster with operational excellence and compete more effectively from a position of strength and differentiation. We are building repeatable, governed and scalable capabilities that enhance client experience, operational efficiency, risk mitigation and most importantly, cultural transformation.

Ultimately, culture compounds across technology cycles, and we believe this is a key differentiator. The rapid adoption of AI across our organization has delivered measurable operational benefits, saving 3 million hours of productivity on a year-to-date basis. Our disciplined and consistent approach to capital allocation ensures that every decision aligns with our strategy and support sustainable value creation. While organic growth remains our primary focus, we also leverage dividends, share buybacks and select inorganic opportunities to drive long-term shareholder value.

I would like to briefly discuss 2 recent announcements that will sharpen our focus on growth and strengthen our platform. First, we've announced a strategic partnership with the Bank of N.T. Butterfield & Son that includes an agreement to sell our 92% stake in CIBC Caribbean for a total consideration of approximately USD 1.6 billion, subject to regulatory approval. Our proceeds will be comprised of USD 1 billion in cash and a fixed number of common shares currently valued at USD 645 million, representing a minority interest of approximately 22% at closing. As we continue to execute on our strategy, this transaction will allow us to reallocate significant capital towards our highest strategic growth priorities.

And on that note, and second, we also entered into a definitive agreement to acquire a minority interest and establishes strategic relationships with and &Partners, a U.S. private wealth management firm managing USD 54 billion in client assets. The investment is consistent with our strategy in this fast-growing segment of the U.S. wealth market and supports &Partners and their clients as the firm's strategic banking partner. Across each of our businesses in Canada, the U.S. and globally, our focused approach and a deep commitment to our clients has driven strong business results to further leverage the connectivity of our client-focused team, both North, South and East West, we will take our collaboration to the next level as we harness the power of our North American platform.

Effective immediately, we are realigning our businesses to reflect 4 strategic business units: Personal Business Banking, Commercial Banking, Wealth Management and Capital Markets. Our external financial reporting will be aligned to these changes in quarter 4 2026. We're bringing our commercial banking teams together in Canada and the U.S. under the leadership of Susan Rimmer, to further the momentum we've established in this business. Susan and our Commercial Banking team here in Canada have built a strong business with a collaborative approach to growth, aligning our U.S. and Canadian commercial teams together will open up new opportunities for us to grow with our clients. We're also aligning our Wealth Management businesses in the U.S. and Canada under [indiscernible] leadership. [ Eric ] has led our Global Asset Management business since 2024, taking an integrated approach to our growth plans across North America. We believe the same approach across our broader Wealth Management businesses will accelerate our growth and create more value for our stakeholders.

Kevin Lee will continue to play in a valuable role in overseeing our U.S. region as we leverage our connectivity across businesses to deepen and expand client relationships. We will continue to have strong collaboration across Wealth Management and Commercial Banking in Canada and the U.S. This is one of the hallmarks of our bank. And I know, Susan, Eric, Kevin and their teams will stay very closely connected moving forward.

In closing, we continue to demonstrate our resilience through the cycle. We delivered another quarter with strong financial results and improved strategic positioning. This is a pivotal time for Canada. A stronger Canada is good for commerce globally and our bank is a role to play. In periods of heightened volatility, our clients turn to us to help them navigate uncertainty. And as the Bank of Commerce, we have remained committed to supporting them every step of the way.

With that, I'll now turn it over to Rob for a deeper look at our financials. Over to you, Rob.

Thank you, Harry, and good morning, everyone. Let's start with 3 takeaways. First, it was another quarter of focused execution that delivered strong earnings driven by balanced revenue growth and positive operating leverage. Second, this consistent performance reinforces our confidence in our organic growth plans. A strategy that is complemented by the inorganic actions we announced today. And third, our capital and liquidity positions remain very strong, even as we grow our client businesses, expand ROE and return capital to shareholders.

Please turn to Slide 9. For the second quarter of 2026, we reported earnings per share of $2.53. On an adjusted basis, EPS was $2.54, up 24% from a year ago. Adjusted ROE was 16.4%, up 250 basis points from the same quarter last year. Let's move on to a detailed review of our performance. I'm on Slide 10. Adjusted net income of $2.5 billion increased 23% and pre-provision earnings were up 19%. Revenues were up 14%, benefiting from balance sheet growth, improving net interest margins and higher fee income. Loan loss provisions were modestly higher, though we remain comfortable with our absolute level of loss at this point in the cycle. Frank will discuss credit in detail in his remarks.

Please turn to Slide 11. Excluding trading, net interest income was up 14% with continued balance sheet growth and expanding margins. All bank margin ex trading was up 17 basis points from the prior year and down 1 basis point sequentially, reflective of the Q2 seasonality to which we had previously guided. Canadian P&C NIM of 301 basis points was up 1 basis point sequentially as the continued benefit from tractors was offset by product mix and competitive pricing. In the U.S. segment, NIM of 390 basis points decreased 11 basis points from the prior quarter, mainly due to seasonally lower deposit balances and lower loan margins. We maintain our expectation of a stable to gradual positive bias on net interest margins over time.

Slide 12 highlights the revenue trends. Noninterest income of $3.7 billion was up 13%, helped by constructive markets and strong trading activity. Market-related fees increased 18% with particularly strong growth in underwriting and advisory, trading, investment management and custodial and mutual fund fees. Slide 13 highlights our expense performance. Expenses were up 10%, driven by revenue-linked costs, increased business activity and technology investments across our bank. Excluding performance-based compensation, expenses were up 4% from a year ago. We continue to pace our expenses relative to our strong revenue growth and delivered solidly positive operating leverage again this quarter.

Slide 14 highlights the consistent strength of our balance sheet. Our CET1 ratio at the end of the quarter was 13.6%, up 20 basis points from the prior quarter. We delivered strong organic capital generation and benefited from a reduction in operational risk weights as disclosed previously. These were partly offset by an increase in organic RWA growth and continued share buybacks. Having now fully utilized our 20 million share NCIB, we have announced a new program for 30 million shares or just over 3% of shares outstanding, pending TSX approval. Our liquidity position is very strong with an average LCR of 131%. Starting on Slide 15 with Canadian Personal and Business Banking, we highlight our strategic business unit results.

Adjusted net income growth of 15% and pre-provision earnings growth of 16% were driven by strong revenue growth. Revenues were up 11% year-over-year, supported by 32 basis points of net interest margin expansion and loan growth. The sequential decline in revenue was largely owing to the impact of 3 fewer days in the quarter. We continue to see tangible results from our focus on deep client relationships, selective balance sheet deployment and disciplined pricing decisions. Expenses were up 6% mainly due to higher investments in technology and other strategic initiatives and higher employee-related compensation.

Slide 16, we show Canadian Commercial Banking and Wealth Management, where net income and pre-provision pretax earnings were up 12% and 19%, respectively, from a year ago. Revenues were up 17% from last year. Commercial Banking revenues were up 10%, driven by higher deposit margins and balances. Commercial loan and deposit volumes were each up 7% from a year ago. Wealth Management revenue growth of 22% was driven by higher average fee-based assets and increased client activity driving higher commissions. AUA and AUM were both up 24% compared with Q2 of '25. CWC Asset Management ranked second among the big 6 banks and retail mutual fund long-term net sales this quarter and first in long-term net sales as a percentage of opening AUM. Expenses increased 15% from a year ago due to higher performance-based and employee-related compensation and higher investments in strategic initiatives.

Turning to U.S. Commercial Banking and Wealth Management on Slide 17. Net income increased 53% from the prior year, mainly due to lower loan loss provisions, while pre-provision pretax earnings grew 10%. Revenues were up 11% from last year driven by loan and deposit growth, higher net interest margins and broad-based fee income growth. Expenses were also up 11% due to higher employee compensation. Turning to Slide 18 and our Capital Markets segment. Net income was up 40% from the same quarter last year as revenues were up 21%, and operating leverage was solidly positive. Global Markets revenue saw continued growth across most products, benefiting from constructive markets and increased client activity. Investment banking revenue was higher mainly in underwriting and advisory and Corporate and Transaction Banking revenues were supported by volume growth. We are pleased with the growth of our client businesses and continue to build those businesses.

As such, based on what we see today, we expect H2 revenues to be above last year's H2 but down from the very strong H1. Obviously, this view is subject to changes in an operating environment that remains fluid to say the least. Slide 19 reflects the results of Corporate and Other, which was a net loss of $47 million compared with a net loss of $15 million in the prior year. On this slide, you also see the financial implications of the Caribbean transaction Harry referenced in his remarks.

At closing, we anticipate that the deal will add roughly 25 basis points to our CET1 ratio. After accounting for the deployment of that capital and our proportionate share of Butterfield earnings, we expect this to be marginally accretive to ROE, but dilutive to EPS by a little over 1%, all else equal. We also plan to book a charge related to the Caribbean in our Q3 results of approximately $350 million, which will be treated as an item of note. So in closing, the second quarter reflected continued revenue momentum and disciplined execution, delivering consistent and sustainable results that are fully aligned with our long-term strategy while maintaining a strong capital and liquidity position.

With that, I'll turn it over to Frank.

Thank you, Rob, and good morning, everyone. Our credit portfolio continues to demonstrate resilience with overall performance remaining broadly stable. Elevated unemployment and heightened geopolitical tensions contributed to an increase in impaired provisions this quarter with some segments of the loan portfolios experiencing more pressure than anticipated earlier in the year. While we are not currently seeing material credit concerns, we continue to monitor the portfolio closely given the evolving economic environment. We remain confident in the quality of our credit portfolio and the prudence of our reserves, which positions us well to manage through the current environment.

Turning to Slide 22. Our total provision for credit losses was $605 million in Q2 compared with $568 million last quarter. Our allowance coverage increased by 1 basis point to 80 basis points. Our performing provision was $57 million this quarter, reflecting the impact of credit migration and the evolving economic environment that resulted in unfavorable changes to our forward-looking indicators. Our provision on impaired loans was $548 million, up $28 million quarter-over-quarter mainly as a result of higher provisions in our Canadian personal and business banking portfolios. These were partially offset by lower provisions in U.S. Commercial Banking, which had a strong quarter.

Turning to Slide 23. We have highlighted impaired trends across our business units. In Canadian Personal and Business Banking, impaired provisions were higher this quarter, mainly due to increased write-offs and a higher allowance for 90-plus day delinquencies consistent with broader economic conditions, along with some seasonality in the portfolio. In Canadian Commercial Banking, impaired provisions remained elevated compared with historical strong performance of this segment driven by a small number of isolated provisions across unrelated sectors. While provisions increased, we see no evidence of broader systemic risk in this book. This portfolio has demonstrated industry-leading performance over the past few years. And while provisions have increased from historic lows, we expect the levels to begin to moderate slightly through the second half of the year.

Performance remained strong in our other business and government segments with lower losses in U.S. Commercial Banking and stable trends in capital markets. Slide 24 summarizes our gross impaired loans and formations. Our gross impaired loan ratio was 66 basis points, up 2 basis points quarter-over-quarter. New formations were down in Q2, with a decrease in business and government loans, partially offset by an increase in consumer loans. In our mortgage portfolio, the gross impaired loan ratio increased this quarter, given continued softness in the housing market. This portfolio remains both well secured and well provisioned with low historical net write-off ratios that we do not expect to materially increase. Slide 25 outlines the 90-plus day delinquency rates and net write-offs of our Canadian consumer portfolios. The 90-plus day delinquency rates increased quarter-over-quarter, primarily driven by residential mortgages. The credit quality of our mortgage portfolio remains strong, supported by a solid loan-to-value profile.

Our consumer net write-off ratios increased this quarter, mainly reflecting continued pressure in the credit cards and personal lending portfolios, elevated unemployment and ongoing economic uncertainty [indiscernible] certain consumer segments. While we continue to monitor the macroeconomic environment closely, we remain confident in the overall resilience of our Canadian consumer portfolios, aligned to our client-focused strategy.

In closing, our overall credit portfolios continue to be resilient despite persistent pressures in the macroeconomic backdrop. As we look to the second half of fiscal 2026, I would expect impaired provisions to be broadly in line with the levels we've seen in the first half of the year. Notwithstanding these pressures, our allowance coverage remains robust and continues to provide a meaningful buffer against potential headwinds supported by disciplined risk management and active portfolio oversight. Overall, we remain confident in the quality of our portfolio and in our ability to manage through the current environment.

And I will now ask the operator to open the line as we welcome your questions.

[Operator Instructions] Our first question comes from Ebrahim Poonawala with Bank of America.

I guess maybe, Rob, if we can spend some time on the net interest margin outlook being a nice tailwind over the last few years. As we think about -- and just listening to some of your peers who reported yesterday, to me, incremental growth seems to be margin dilutive and deposit growth and pricing seems super competitive. One, like do you agree with both those statements? And then if yes, is there material offset with the tractoring that we should be mindful of that could still sort of propel margin expansion? And I think you have a slide showing mortgage spreads also tightening over the last few months. So train that for us in terms of the risk that the margin expansion story is over.

Thanks for the question. So we tweaked our slide a little bit to show the margin breakdown more in the way we think about it and talk about it on these calls. You may not have gotten there with the volume of material that you have coming at you today, but we think it's a helpful way to think about the margin. And so the hedging strategy, the so-called tractoring is going to continue to provide a benefit. In fact, if anything, over the last several months, the curve has steepened somewhat. And so the intersection point between the roll on and the roll-off of the hedges has actually been pushed out a couple of quarters from where it originally was.

Now that's obviously subject to market changes. But at the very least, the hedging strategy will continue to kick off at the all-bank level, we think, in the 1 to 1.5 basis points gradually falling away at some point in 2027. The rest of what you're talking about from a product mix perspective, our strategy is really unchanged in terms of where we're focused. And we do think the money in -- particularly the money in focus, the deposit focus is something that all of our businesses have. And while we're down a little bit this quarter from a just expected seasonality on the deposit side in particular, we do think deposits are going to continue to be a focus and continue to help the margin overall.

And then from a pricing perspective, there's no question it's a competitive market, frankly, on both sides of the border, it's a competitive market. But we're focused on the client, focused on doing right by the client. And so overall, we think we can manage the margin. So what you've seen in recent periods have been some significant margin expansion quarter-on-quarter. I'm not sure I would model that. But we remain constructive on the margin in terms of a gradually higher -- flat to gradually higher over time as we look forward to the next several quarters.

Our next question comes from Matthew Lee with Canaccord Genuity.

Maybe one for Susan. So with Commercial Banking now reporting to you on both sides of the border, should we think about this as primarily a client connectivity move? Or is there some desire to manage the North American commercial balance sheet more consistently. In particular, how could this change the way you think about deposit gathering, loan growth, capital allocation across both the U.S.?

Yes. Thank you, Matthew. So as we think about the commercial banking business, we're really excited about the opportunity to frame our business in a north-south dimension. Looking at commercial banking on a North American basis, following our clients, as they actually invest from Canada into the U.S. and vice versa is going to be an important priority. We do think that there's an opportunity to continue with our culture of connectivity and really driving our origination efforts properly with our clients, both sides of the border.

We will look at capital allocation. We will look at efficiency. We will look at all of those business imperatives to continue to drive a real best-in-class result for shareholders. So I'll conclude by saying we're excited about the opportunity to work together with Kevin Lee and the team in the U.S.

Our next question comes from John Aiken with Jefferies.

In terms of the sale of the Caribbean, is there any restrictions on the 22% stake that you're going to be taking in Butterfield?

John, it's Rob. No restrictions other than the closing conditions and the rest. We will manage that 22%. We're excited about the combination. We're excited about what this means for the region and what it means for our team members and clients. So there's no immediate plans to change our ownership stake, but there's no permanent restrictions. And I think Harry might want to add a few points on the Caribbean as well.

Yes. Thank you, Rob, and thanks for the question. I do think that I'd like to just highlight how pleased we are with this combination. This will create the leading bank serving the English-speaking Caribbean and Atlantic jurisdictions. and really positioning our business as a platform for strength and support in the region. And the transaction brings together 2 complementary banks with deep roots and established relationships across the region.

We've been working with Butterfield for many, many years in the past. So we know them well. Clients will benefit from an expanded range of financial services, including Butterfield's trust and wealth management expertise. And importantly, the transaction enables us to allocate capital towards our highest strategic growth priorities. So we're really pleased with the combination.

Our next question comes from Gabriel Dechaine with National Bank Financial.

Just a couple of things here. I'd like to revisit that mortgage spread slide, you could step down a lot. I'm wondering, is that a big deal for you? You've got a large mortgage book proportionately. And not just for you, but a lot of banks have been talking about mortgage refinancing spreads as a tailwind? Is that gone now? Is it being competed away? And my second question relates to the -- well, the strategic priorities you have of the excess capital coming from the Caribbean sale, you mentioned tuck-ins, I think, geographically, whatever segment, whatever business line. Can you give me a bit of sense of what you're looking at there?

It's Rob. I'll take the first part, and then I'll pass on for the second part on the strategic priorities across the enterprise. So thanks for the question on mortgages, right? And I'll start by reminding everybody we've got a client-focused strategy our priorities are to continue to engage the 14 million clients that deal with us, the vast majority of whom have everyday banking products with us, they're checking accounts, the credit cards, the engagement day today, and that's a big priority for us. We're also trying to win in the mass affluent segment. And across those 2 things, mortgages obviously do come in. They're a key product for our clients. But the way we've managed mortgages is we are continuing to price for profitability, but also price to win business with clients where the overall profitability and relationship with that client is accretive to the shareholder.

And if you look at that over the last little while, mortgages have been going down, right? So you did say we have a big mortgage book, of course, we do. It's a core product for our clients. But we've talked in the past, it's around the 10% of our revenue range. So it is not as material a driver as it was before. Second is while the spreads have come down and it was a bit tougher in Q2, it does look a little bit better going forward, there is still a positive spread there. And so that positive margin trajectory Rob described, at least on our end, given our strategy and how we're competing. There is positive contributions from the mortgage roles, and we continue to expect some positive contributions from the mortgage roles going forward.

And lastly, I'll say, look, we'll follow our strategy. It's been working for us. If you look at the last number of quarters, we've had street leading revenue growth. We've outperformed on the deposit side, even when you look at this quarter, we've outperformed in credit cards. And that's what's leading to the street lending NIM we have in the retail segment. And our goal is the same, create a premium margin bank by focusing on the right clients and the right products.

And Gabe, it's Rob. So just to follow up on your second question, Harry referenced the 4 capital deployment buckets in his prepared remarks. And we were active on all 4 of those this quarter. Organic growth -- we continue to see opportunities to deploy across our businesses and quite happy with the progress. And he also referenced us as the Bank of Commerce. We do look forward to continuing to grow with our clients throughout our North American footprint and frankly, throughout our global footprint. So we think the organic deployment is going to remain the primary answer here. Dividends have been growing. We have revisited annually. The buybacks have been active and we actually had a small tuck-in acquisition as we had discussed previously.

So I wouldn't suggest that this changes our capital deployment plans, if anything, we're happy to run with a strong balance sheet. It's there to support our clients. It's there to protect our shareholders and stakeholders. And we feel very comfortable with where we've landed and the opportunities to deploy over time.

I guess the -- my question is more along the lines of sizing, but tuck-ins are still -- if it's inorganic tuck-ins or the app description?

That is 100% still the right description.

Our next question comes from Doug Young with Desjardin Securities.

Yes. So just Harry or Rob, if you can elaborate on the U.S. tuck-in, sorry, I got distracted. But I think you said you did a U.S. wealth acquisition or tuck-in acquisition. Can you just size that maybe a little bit more detail? And then Rob, you talked about dilution from the Caribbean deal. I assume that goes through other Obviously, other is always a real tough one to model. Like what's the guidance on how we should be thinking about the other division?

So yes, it will flow through the Corporate and Other at close. That close is still open to exactly when it's going to happen. But just given there's some puts and takes because the -- our proportionate share of Butterfield will also sit in corporate and other. So when you think about it, like I said, a little over 1% overall dilution to earnings per share while still being marginally ROE accretive.

In terms of the acquisition, we didn't disclose the terms, but I'll hand it to Kevin to talk a little bit about what we've done and why we've done it.

Sure. Thanks, Rob, and thanks for the question. And just to back up a bit. We've been talking about wealth tuck-ins for a period of time, and we're happy to have found something that I think is really, really interesting. We did not disclose the size. It is a very fast-growing hybrid RIA broker-dealer. It's based in St. Louis, although advisers across the country It's, as I said, very fast growing. It's highly complement to each of the business we have today and very, very excited to make it part of the family.

Our last question comes from Mario Mendonca with TD Securities.

I kind of want to go back to that question on the U.S., perhaps this is for Harry or for Kevin, it does appear that CIBC has sort of hit its stride in the U.S. It was a business that for some time now, I think you're investing sort of cleaning up processes and controls. But am I right to suggest that part of the journey in the U.S. is over and that the bank is now -- you hit your stride in the U.S.? And if I've got that right, and if I also have it right that the U.S. regionals and it looks like a lot of these folks are up for sale right now, does it make sense that CIBC would look at another deal? It's been a long time since the PVTB deal. Does that make sense?

It's Harry. I'll kick it off, and I'm going to pass it over to Kevin to go into some detail around our client franchise, et cetera, in the U.S. because we're very proud of our team and our client franchise in the U.S. I'd just say that when we look at our U.S. region, we look at it from a capital markets, commercial banking and wealth management viewpoint. So all the businesses are highly connected. And you make a good point. We have invested very heavily over the years in the infrastructure, the foundation of our U.S. operations, and we feel very good about where we are today on the back of those investments in technology systems, talent, et cetera. The connectivity with CAD is going to be enhanced with our new SBU structure, but Kevin Lee, as CEO of the region, is driving the business in that area.

So Kevin, over to you just to talk a little bit about the business and the opportunity.

Sure. Thanks, Harry. And thanks, Mario, for the question. So I think you've got it right. I mean, there have been a number of foundational investments that have made over the past years. And the good news is it's really put us in, I think, a enviable position to grow from today. And I think you're starting to see that in the last couple of quarters with some notable expansion of ROE and some noticeable continued growth across the segments.

We feel really, really good about where we are. And I think that the change in SBU that you're seeing now is really just a representation of us taking this to the next level in terms of collaborating, both North, South and East West. It's not an or, it's an and. Team is very, very excited about taking our collaboration to the next level. And as you said, I mean, I think the opportunity for us in the U.S. continues to be very, very meaningful, both in commercial as well as wealth.

I might just add as well, it's Harry again that our capital deployment will be stable steady, predictable, consistent, Mario, we've had some very good success with tuck-in acquisitions and team lift outs over the years. And so we're really focused on driving our organic growth. And you see the strength of our balance sheet. Our funding, our capital, our risk management is, we think, street leading. So we're going to continue to focus on our organic growth trajectory taking that to the next level.

Yes. I mean it's the capital and the improvement in operations in the U.S. That's made me ask that question, but my interpretation from your responses is that that's not a priority for CIBC an acquisition.

That's correct. That is correct.

If we could flip over to Canada for a moment. Every bank is showing some momentum in their commercial lending in Canada. And while it seemed plausible to me that, that was going to happen at some point in 2026, maybe '27, it seems like that's coming in a little sooner. Do you have a sense for why it's coming in sooner and what sectors we're actually seeing some growth in C&I? I want to understand if this is if this is real, if this is enduring or maybe just a 1 quarter thing?

Yes. Thank you. It's Susan speaking. So we continue to expect loan and deposit growth in the second half of the fiscal year. And we continue to guide to mid- to high single-digit growth year-over-year. We do -- we did post, you saw it. We posted a 7% growth in loans and deposits. year-over-year. We're quite proud of that. We are pacing growth ahead of market. We do practice a relationship business model and most of our growth in Commercial Banking is coming from new clients to CIBC. The growth is coming mostly from what we would call our diversified segment. It's diversified by way of geography. It's diversified by way of industry type -- the pipelines are strong, and I would say that our clients are demonstrating real resilience in the face of uncertainty in the economy. We do travel across the country and spend time with our clients when we're really encouraged by their continued ambitions to grow.

I might just add, if I may, Mario. I think it's a great question. The economy continues to show resilience. As Susan points out, our clients are resilient despite the uncertainties out there. If we look at our base case '27 outlook, there's less uncertainty, it's a stronger growth. I believe this is a pivotal time for Canada and for our clients globally. And now is the time really we believe, to act with urgency and really leverage the opportunities with pace. And so as we have since 1867, I don't know if I told you this Mario, but 2 months before Confederation, our bank was formed. And so we stand ready to be helpful and very involved, and we're quite optimistic about Canada's long-term prospects here. So we plan to be very involved and very helpful.

Okay. Because there's just a couple of minutes sort of time left for me. Can I just go back to the and CIB, the 3%, one of your peers just announced there 3%. It's just big numbers like 30 million shares, 45 million shares. How do I interpret this? It's not every bank announces an NCIB and actually does it? Given where things stand today, we all know valuations for Canadian banks, look, and they look heavy. We all know that. Would you point me to doing the whole 30 million or not?

Mario, it's Rob. So yes, we've -- this is the third announcement. We've completed 20 million shares and now we've upsized it to 30 million shares. We announced these things because we intend to use them. But the nice thing about the buyback is we've got some flexibility depending on how organic growth comes in. And so we use the buyback sort of as the outlet to manage excess capital, the outlet to manage the delta between organic growth and what we're generating. And the ROE has been rising as well.

So our generation has been going up, while -- even while our loan growth has been rising. So the plan is to use it, but it's also one of these things that it's organic growth is what's truly driving our capital planning and the buyback is more of an output from that. But with the 13.6% CET1 and continuing to build, we do expect to remain active on the buyback.

Thank you. I would now like to turn the meeting over to Harry.

Thank you, operator, and thank you all for joining us this morning. We continue to remain laser-focused on delivering against our strategy and our purpose. Our employees continue to show remarkable pride in their work. and our partnerships are as strong as ever had our clients deeply appreciate our unique advice and service.

And to that end, I'd like to thank the entire CIBC team for their commitment to our clients, our communities and our shareholders and to one another. So thank you for joining us today and for your continued interest in CIBC.

This concludes today's conference call. You may now disconnect.

[Foreign Language] and good morning. My name is Chantal St-George, and I'm a Senior Product owner in digital banking at CIBC. I'm a proud Métis woman and a member of the CIBC Indigenous Employee Circle working to promote belonging within our community and across our bank. I also belong to the Personal Business Banking Inclusion Action Committee to help influence indigenous representation across our business to match talent to opportunity.

I started my banking career as a university student through an indigenous internship program, which provided my first opportunity to enter the industry. I'm grateful to work at CIBC, an organization dedicated to inclusion, celebrating indigenous culture, communities and talent.

I'm now pleased to open CIBC's 2026 Annual Meeting of Shareholders by acknowledging that the land from which I'm speaking in Toronto is a traditional territory of the Haudenosaunee, Anishinaabe and the Mississaugas of the Credit First Nation. Today, the meeting place of Toronto is still home to many indigenous people from across Turtle Island, and we are grateful to have the opportunity to work in this community.

I would like to now turn the meeting over to the Chair of our Board, Katharine Stevenson. Thank you, and [Foreign Language].

Thank you, Chantal, for opening our meeting today. Thank you for sharing your story with us and for your many contributions across our bank. Good morning. My name is Kate Stevenson, and I'm the Chair of CIBC's Board of Directors. I'm so pleased to be with you here today, and it's my pleasure to welcome you to CIBC's 2026 Annual and Special Meeting of Shareholders.

[Interpreted] Good morning. Welcome to CIBC's 2026 Annual and Special Meeting of Shareholders.

I have received satisfactory proof that notice of this meeting was duly given and that a quorum is present. Therefore, I declare the Annual and Special Meeting of Shareholders duly constituted, and I call the meeting to order. We are pleased to be holding our meeting today in person at CIBC Square in Toronto and through our live webcast as well as being joined by shareholders and guests listening by phone.

I'm joined on stage today by Harry Culham, President and CEO; and Natalie Biderman, Vice President and Corporate Secretary. We also have our senior executive team and Board of Directors here with us today. Great to see you all.

Natalie, could I ask for you to explain how the meeting will proceed?

Absolutely. Thank you, Kate. Remarks will be made in both English and French today and simultaneous translation will be provided in the auditorium as well as both over our English and French webcasts and phone lines. If you are attending in person, interpretation is available through the device that you can find on your seat. Please turn to Channel 1 for English and Channel 2 for French. The device will not work outside of this room. So please leave it on your seat at the end of the meeting.

[Interpreted] Many of our shareholders cast their votes in advance of the meeting. We thank you for doing so. A small number of shareholders have decided to vote here at the meeting. If you voted in advance and do not wish to change your vote, no action is required on your part.

Many shareholders submitted their votes before the meeting. Thank you. A small number of shareholders have decided to vote at the meeting. If you voted in advance and you do not wish to change your vote, no further action is required. If you are a shareholder or proxy holder attending in the auditorium and you have not voted yet or you already voted but would like to change your vote, you should have received a ballot at the registration table.

To assist the scrutineers in validating and tabulating ballots, after you vote, please print and sign your name in the space provided. If you are a shareholder or proxy holder attending through the live webcast and you wish to vote during the meeting or change your previous vote, you must click on the Vote tab at the top of your screen and a separate browser window will open. You can register to vote by entering your control number as a user name and entering cibc2026, all lower case as your password. You would have received a control number with your meeting materials by mail or e-mail. Or you received it when you registered as a proxy holder with TSX Trust Company, our transfer agent.

[Interpreted] Voting will remain open throughout the official portion of the meeting. If you encounter any technical difficulties, a help button for technical support is located at the bottom of your screen.

Not receive a ballot and would like to vote, please raise your hand and a scrutineer will bring a ballot to you. Would our scrutineers, please hand out the ballots now.

If you wish to make a comment or ask a question and you are in the auditorium, please approach one of the microphones in the room and state your name and whether you are a shareholder or a proxy holder. Please limit your comments to 3 minutes so that other shareholders will have an opportunity to speak if they wish. For those attending via the webcast, if you wish to make a comment or ask a question, you should select the message icon at the top of your screen and type your question or comment in the text box.

Please indicate whether you are a shareholder or a proxy holder. Once you finish typing, click the submit button. Your comment or question may be about the motion being considered or something more general. We will answer questions on a particular motion at the appropriate time in the meeting. Please hold your general questions for the comment period at the end of the meeting.

I will read questions submitted online and the appropriate person will address them. If we receive a number of questions on the same topic, we will group the questions together and provide a comprehensive response. We will respond to as many questions as possible during the meeting. If we are not able to address your question here, we will respond to you after the meeting if you provide your e-mail address or telephone number to a member of our Investor Relations team.

Kate, that concludes my lengthy instructions.

Thank you, Natalie. The remarks you hear today may include forward-looking statements, and actual results may differ materially. Also, some of the matters discussed today may include references to non-GAAP financial measures. Details about forward-looking statements and non-GAAP financial measures are in our financial reports. Welcome to our 159th Meeting of Shareholders of our bank.

[Interpreted] Welcome to the 159th Annual Meeting of Shareholders of our bank.

This meeting is being held in both English and French and will be available on CIBC's website at www.cibc.com for future reference. Natalie will act as Secretary of the meeting. The TSX Trust Company through its representatives present here today will act as scrutineer. Our agenda for today's meeting will begin with a presentation of the 2025 annual financial statements followed by remarks from our CEO, the election of directors, the appointment of auditors, an advisory resolution regarding our executive compensation approach, a resolution for an amendment to CIBC's employee stock option plan, a special resolution to amend bylaw #1 regarding directors' remuneration, shareholder proposals, shareholder questions and comments and preliminary vote results.

So now at this point of the meeting, I'm pleased to present the annual financial statements and auditor's report for the year ended October 31, 2025, which can be found in our annual report. CIBC's annual report, management proxy circular and first quarter report are available on our website. The floor is now open. Does anyone have any questions on the 2025 financial statements? Please hold questions not related to these statements to the comment period later in the meeting.

Natalie, are there any questions from the webcast?

There are no questions.

So it's now my pleasure to invite Harry Culham, CIBC's President and Chief Executive Officer, to address the meeting. Harry? Good morning.

[Interpreted] Thank you, Kate. Good morning, everyone. Welcome to our global headquarters at CIBC Square, and welcome to everyone joining virtually. We appreciate your confidence in our bank. I'm pleased to address our annual meeting today. I'm honored to have the opportunity to lead our bank as we embark on the next chapter in our history.

Today, I will highlight our momentum, our strategy and how we're helping our clients at this pivotal moment in history. Let me start with 3 key messages: First, our bank's financial performance is strong, and our momentum is clear. I want to thank our dedicated team around the world for everything they do for our clients. Our results are a testament to your dedication. And I want to thank all of our clients and stakeholders for the trust you place in CIBC. Second, our success is being driven by the disciplined execution of our strategy in Canada, in the United States and around the world. And third, Canada, like many countries, is at an inflection point. We believe in the vast potential of Canada. However, with an unsettled geopolitical environment, now is the time for us to act. Let me begin by highlighting our financial performance. We're proud that fiscal 2025 was a very strong year for our bank against a fluid and challenging economic backdrop.

On an adjusted basis, we reported full year net earnings of $8.5 billion and earnings per share of $8.61, up 17% and 16%, respectively. Revenue of $29.1 billion was up 14%. And more recently, quarter 1 of fiscal 2026 was an exceptional quarter at CIBC with record revenue in each of our business units. Net income grew by 23% year-on-year in quarter 1. Return on equity was 17.4%, higher on a year-on-year basis for the seventh consecutive quarter. Our balance sheet is robust, allowing us to return capital to shareholders while really focusing on investing for growth. It's clear, our strategy is consistent, it's working and it's delivering results. Accelerating the execution of our strategy at pace and with urgency is the key to delivering more for our stakeholders.

Let me give you examples of our momentum by taking you through our 4 strategic priorities. A key priority is to grow our mass affluent and private wealth franchise. These are important segments in Canada and the U.S., and we are capturing high-quality growth. Our client satisfaction scores continue to reach all-time highs as we invest in our team, our processes and our technologies to support our clients. Secondly, we're focused on expanding our digital-first personal banking capabilities. CIBC was named Best Consumer Banking Mobile Experience for Canadians by ServiceScore for the eighth time in 9 years. And we launched a new digital banking platform in the U.S. market to drive deposit growth by meeting the needs of clients seeking a digital savings solution.

In addition, our Simply Financial brand continues to resonate with Canadians, particularly students and newcomers with this modern digital offering. Another priority for our team is delivering connectivity and differentiation to our clients globally. We see clear evidence of momentum here. Cross-business referrals increased 23% within the U.S. Commercial and Wealth Management segment in 2025. And 32% of Canadian Commercial Banking clients now have a private wealth relationship with CIBC. In 2025, U.S. capital markets revenues were up 39% from the prior year, supported in part by healthy referral activity from our commercial and wealth businesses. Across our bank, when a commercial banking client needs capital markets expertise or a wealth client needs commercial banking capabilities, we connect them seamlessly. We do that across business lines and across borders. Our connectivity is a competitive differentiator.

And finally, we are focused on enabling, simplifying and protecting our bank. Ensuring our bank's operations are efficient, secure and resilient allows us to better serve our clients and safeguard their interests. A key area of focus is leveraging AI to deliver more for our stakeholders. CIBC has a history of innovation, a track record of being first, not for technology's sake, but for the benefit of our clients, our team and our shareholders.

We view AI as an accelerant. It helps us execute faster with greater precision and at scale. Simply put, it amplifies and enhances our proven strategy. AI can support revenue generation and a better, more personalized client experience. In addition to freeing up valuable time for our frontline advisers, we're also using AI to help generate more personalized product offerings and timely insights for clients through our new CRTeX platform. Additionally, we're creating efficiencies with AI, allowing us to reinvest for growth. In quarter 1 alone, AI-driven tools saved our team 1.2 million hours.

This allows our talented team to spend more time on high-value activities for our clients, and that means we can reinvest our most important resource, our human capital into growth opportunities for our bank. We're also focused on mitigating risk. AI allows for enhanced fraud detection, credit monitoring and other important activities. It makes these efforts faster and more effective, protecting our clients and protecting our bank. We're making the right investments with the right governance to build for the future.

Overall, our strategy is working. Right across our bank, we have clear sustainable momentum. Our team is focused on accelerating our execution in 2026 and beyond. We're sharpening our client focus and connectivity. Across our team, we're enhancing client coverage and collaborating more closely together across business lines. We're creating efficiency by modernizing our bank.

As we leverage new technologies, including AI, to make our efforts more efficient, we're reinvesting in those resources in the greatest opportunities for growth. And we're elevating our focus on human capital. Our team is a differentiator for CIBC. We're investing in their collective capabilities to further our growth moving forward. These enablers are helping to accelerate the execution of our strategy across our bank and creating more value for all of our stakeholders. We're also creating value by convening clients around the opportunities and challenges that matter most.

Recently, CIBC brought together 300 leaders from the nuclear energy sector with senior government ministers and officials. This is an area of significant strategic advantage, and we discussed how we can accelerate the build-out of nuclear energy capacity that the world needs. We do the same at our annual investor conference in Whistler. We bring together companies and institutional investors to facilitate the capital formation that drives growth. This is client service in action. We succeed when our clients succeed.

Our history tells a compelling story. Wherever ambitious clients pursue new opportunities, CIBC is there to support them. We have played this role since our founding in 1867. We're the bank that helped capital flow to Canadian businesses after confederation. We're the bank that stands behind critical and growing sectors across our economy. We're the bank that supports families in planning for their financial futures. And today, we're the bank that supports our clients in achieving their growth ambitions here at home in the U.S. and globally.

We're the Bank of Commerce. We always have been and always will be. We are the Bank of Commerce. We have always been and always will be now more than ever. From trade and tariffs to geopolitical tensions, we are arguably in one of the defining moments in history. This has forced us to confront some challenges and uncertainties, but it has also prompted us to reflect on our many strengths as a nation. I've met with CEOs, clients, indigenous communities and political leaders.

If I were to summarize all that I've heard in these conversations, I would say there are 3 themes. First, there is cautious optimism generally. While there is complexity in the short to medium term, the majority of businesses are confident about Canada's future. They see the potential and need for us to help lead. We aim to help build a vibrant economy that fosters long-term high-quality employment. This can help us achieve greater prosperity in our major cities and in our smaller communities. Second, there is a belief that our time is now. In every conversation, the urgency is clear. The actions we take today as a country will define the success we achieve tomorrow. Pace, urgency and a public-private partnership are critical. And third, all of us, the private sector, government, indigenous groups need to prove that we can come together to get major energy and infrastructure projects built on time and on budget to realize Canada's potential.

We also need to support our small- and medium-sized enterprises. This includes the defense sector in an industry that is becoming increasingly important. In order to become truly resilient, we must focus on issues that matter to our communities, such as food and energy security and the building of key infrastructure to support economic growth.

Our collective ability to execute has never been more important. For too long, capital has flowed outside of our country. This is true of financial capital, but it's also true of human capital. We can't afford to lose either. Young Canadians are just as vital to the future of this nation as the next dollar of investment capital. As we risk losing them to global economies have greater potential for developing a future if we don't act now. For us to reverse this trend, we need to think in terms of months, not years. And doing so will attract investment and drive productivity.

Our economic foundation is still incredibly strong, but we need to do more to achieve our potential. The time is now to fully leverage our strengths. We need to stake our claim, our rightful claim as a natural resource superpower. Canada's energy, uranium, critical minerals, potash, agriculture and other resources are all in high demand. We are a leading supplier of low carbon forms of energy. Given our natural advantages, these are areas where we should be world leaders. We also need to press our advantages in talent and innovation.

Canada is home to the world-class academic institutions. We have one of the most educated workforces in the world, and we are home to many innovative technology companies. This includes areas such as AI research and development, health sciences, climate tech, engineering to name a few. With innovation, specifically, we must ensure these firms have the tools they need to successfully scale and commercialize. There's never been a better time for Canadian business to think globally and seize new markets as Canada builds bridges and opens up new trade opportunities.

At the same time, we need to resolve our ongoing trade issues with our largest trading partner. I know our clients on both sides of the border would welcome certainty so that we can move forward and grow the most successful trading relationship in the world. Leveraging these many advantages requires a collaborative approach to growth with a bias to urgent action. Our bank is taking decisive action to support this critical effort.

Over the past 3 years, we've supported growth by increasing corporate and commercial lending in Canada by almost $20 billion and we stand ready to do much more. We're committed to increasing financial support to directly drive economic growth. We will bring capital, expertise and execution capabilities to our clients because we believe in the benefits in realizing the vast potential of Canada here at home for our stakeholders and around the world.

National prosperity and resilience starts locally. That's why we remain deeply committed to the communities where our clients and our employees live and work around the world. I'm proud to share that we are committing $800 million by 2032 to support the communities and neighborhoods we call home across our global footprint. These funds help support cancer research, childhood development, community building, financial health and well-being, our culture of care reflects our purpose to help people, businesses and communities realize their ambitions.

Let me close where I began. 2025 was a very good year for CIBC. Strong financial results, a highly engaged employee team, excellent client satisfaction metrics and top-tier shareholder return. We have clear momentum, the right strategy and a team that knows how to execute. I am proud to lead this organization. Incredibly proud to lead this organization because of our rich history and because of what we're building for the future.

To our CIBC team, thank you. You put our clients at the center of everything you do, and it shows to our clients, thank you for your trust. We do not take it for granted. To our shareholders, we're focused on delivering sustainable long-term value. We have the platform, we have the people, we have the strategy, and we have the discipline to do exactly that. And to those investing in a stronger future, we stand ready to support you as the Bank of Commerce. [Foreign Language]. Thank you.

Thank you, Harry. Thank you so much, Harry. On behalf of our Board, I'd just like to thank you for your strong leadership, especially now in your first year as CEO, but leading up to that for a long time. Thank you, Harry. And under your leadership, our bank continues to remain highly focused on our clients and is creating enduring value for all stakeholders. And also, I'd like to recognize our entire CIBC team for their commitment to our clients, team members, communities and shareholders in 2025.

I'd now like to return to the formal business of the meeting. For shareholders and proxy holders voting in the room, please mark your ballot for each item. The ballots will be collected after you voted on all of the items. For shareholders and proxy holders who registered to access our online voting platform, polls are open and will remain open until we complete the formal business of the meeting.

I'll pause briefly following each item of business to allow sufficient time for those voting online. If you've already voted, no further action is required unless you wish to change your vote.

The meeting is now open for the nomination of directors for the coming year. This year, the number of directors to be elected is 13. They are seated in the auditorium here today to my left. They are Ammar Aljoundi, Michelle Collins, Marianne Harrison, Kevin Kelly, Christine Larsen, Mary Lou Maher, William Morneau, Mark Podlasly, Francois Poirier, Martine Turcotte and Barry Zubrow, and Harry Culham and I complete the list of nominees for election as directors.

I'd now like to ask that our nominees stand to be recognized. Thank you. Thank you all to our great Board members.

I now call on Jean Robert for a motion. Welcome.

[interpreted] Good morning. Thank you, Madam Chair. My name is Jean Robert Pimm Dupuch. I am a coordinator with Client Complaint Appeals Office. I've been with CIBC for 9 years. It is my pleasure to nominate for election each of the 13 persons named in the 2026 management proxy circular as a Director of CIBC until the close of the next Annual Meeting of Shareholders or until their successors are elected or appointed, whichever is earlier.

[Interpreted] Good morning. Thank you, Madam Chair. My name is Christina Wood, and I'm a Director with Global Electronic FX. I have been with the CIBC for 17 years now, and I second the motion.

Albert. Thank you, Christina. The floor is open for comments or questions on the election of directors. Are there any comments or questions from the webcast?

There are none, Kate.

Okay. Thank you, Natalie. So I declare nominations close. All the individuals nominated are standing for election.

If you're a shareholder or proxy holder in the room, please mark your vote for Item #1 on your ballot regarding the election of directors and hang on to it. The ballot will be collected after you've voted on all items. If you're a shareholder or proxy holder and have used your control number to log into our webcast, you may record your vote on the election of directors now unless you've already done so.

Please remember that if you voted in advance of the meeting and you don't wish to change that vote, no further action is required. I'll pause just for a moment to allow time for those casting their ballots.

[Voting]

The next item on the agenda is the appointment of auditors. I'll call on Victoria, if I may, for a motion.

Thank you, Madam Chair. My name is Victoria Ong, and I'm a Director with Risk Management. I've been with CIBC for 10 years. I move that Ernst & Young LLP be appointed as the auditors of CIBC until the close of the next meeting of the shareholders.

I'll now call on Bahar to second the motion.

Thank you, Madam Chair. My name is Bahar Suncak. I'm a Banking Centre Leader with Personal Line Business Banking. I have been with CIBC 4 years. I second the motion.

Thank you, Victoria, and thank you, Bahar. The floor is open for any comments or questions on the appointment of auditors. Natalie, any comments or questions from the webcast?

There are no comments or questions, Kate.

Thank you. Please mark your vote for Item #2 to record your vote for the appointment of auditors. Please remember if you voted in advance of the meeting and you don't wish to change your vote, no further action is required.

[Voting]

The next item for business is an advisory resolution regarding our executive compensation approach. The Board considers this vote to be an important part of our shareholder engagement process, and we review the results of the vote when considering future executive compensation decisions. I'd like to now call on Frederic for a motion.

[Interpreted] Thank you, Madam Chair. Good morning. My name is Frederic Buruiana, and I'm a Managing Director with Government Solutions Group at the CIBC. I've been working at CIBC for 3 years. I move that the shareholders accept the approach to executive compensation disclosed in CIBC's management proxy circular for the 2026 Annual and Special Meeting of Shareholders. Thank you.

Questions are coming in French. That's very nice this year. I'll now call on [indiscernible] to second the motion.

[Interpreted] Thank you, Madam Chair. My name is [indiscernible]. I'm a consultant and Secretary -- Executive Secretary, and I've been working at CIBC for 13 years, I support the proposal.

The floor is now open for comments or questions regarding our executive compensation approach.

[Interpreted] Yes. My name is Willie Gagnon. Thanks for giving me the floor. I usually take the floor at this point at each meeting, I raise questions about compensations if -- just give me a moment. In the compensation chart on Page 89 in the circular in the French language version, we can see that there are 2 people who have been the CEO this year up until October 31, 2025. And then someone else individually, their compensation is not the highest that one finds among the country's banks.

But if you add the 2, they played more or less the same role. You have, therefore, the CEO who is the best paid CEO in the country when you combine these 2. And then there's the whole question of compensation ratios, which is too high in our view. We call on shareholders to vote against this compensation policy, this philosophy, as you call it. I'd like to just point out by the way, that there is a bank this year that compensates its CEO in a reasonable way that is 20 to 30x the average salary of its employees. That's the Laurentian Bank. Unfortunately, Laurentian Bank is no longer on the stock market, it has been sold. But I think this shows that it's possible to provide lower compensation for CEOs who perform these tasks. That's what I wanted to say. Thank you.

Thank you, Mr. Willie Gagnon, for your question and comment. Certainly, the Board oversees executive compensation. We did have one CEO until October 31, 2025. Victor Dodig, who served for 11 years and really outstanding service. His final year last fiscal year was absolutely outstanding in terms of financial performance, top-tier performance, and he truly transformed the bank's culture. So we did pay one CEO.

We do have a CEO of our U.S. business, which might be also what you are thinking about, which is -- and those compensation arrangements are certainly standard. I do hear what you say about compensation fairness, looking at CEO pay versus average employee pay. That's something that our Management Resources and Compensation Committee does review. And I think our whole compensation approach where we look at a business performance factor, which represents the value that our team has contributed over the course of the year and an individual performance factor and having standard compensation for each role in the bank really helps us with fairness in compensation, which is very important to us and to be aligned to shareholder returns and also to be able to attract the very best and to retain them. So thank you.

We will now move on. Any other questions in the room or questions from the webcast, Natalie?

No questions.

Okay. Could you please record your vote for Item 3 on your ballot. Once again, if you voted in advance of the meeting and don't wish to change your vote, no further action is required.

[Voting]

Amendment to CIBC's employee stock option plan is the next item. It's a resolution regarding an amendment to CIBC's employee stock option plan is set out in Pages 1 and 2 of the 2026 management proxy circular. And I'll now call on Romonica for a motion.

Thank you, Madam Chair. My name is Romonica Morrison, and I'm the Director for Capacity Planning and Operational Effectiveness in Personal Banking and Imperial Service. I've been with CIBC for 27 years. I move that the motion be disclosed -- as disclosed in CIBC's management proxy circular for the 2026 Annual and Special Meeting of the Shareholders be confirmed.

I'll now call on Analisa to second the motion.

Thank you, Madam Chair. My name is Analisa Allen, and I'm a Senior Manager with Communications and Publications Private Wealth. I have been with CIBC for 5 years. I second the motion.

Thank you, Romonica, and thank you, Analisa. The floor is open for comments and questions regarding this resolution. Anything from the webcast?

There are no questions, Kate.

Please record your vote for Item 4 on your ballots.

[Voting]

The next item of business is the confirmation of the amendment to the bank's bylaw #1 regarding the aggregate remuneration of directors. This resolution confirms the amendment that's set out on Page 3 of the 2026 management proxy circular.

I'll now call on Shelley for a motion.

Thank you, Madam Chair. My name is Shelley Nigh, and I'm a Director with Regional Sales. I've been with CIBC for 5 years. I move that the special resolution as is disclosed in CIBC's management proxy circular for the 2026 Annual and Special Meeting of Shareholders be confirmed.

And I'll ask Baran Emam to second the motion, please.

Thank you, Madam Chair. My name is Baran Emam, and I'm a Director of Liquidity Management. I've been with CIBC for 11 years. I second the motion.

Thank you, Shelley, and thank you, Baran. The floor is open for questions or comments on this resolution. Anything from the webcast?

Nothing on the webcast.

Please record your vote for item #5 on your ballots.

[Voting]

Next, you'll be asked to vote on 7 shareholder proposals. [Interpreted] Has submitted 7 shareholder proposals. Following discussions and correspondence with CIBC, MÉDAC has decided to put 7 of its proposals to a vote at today's meeting. We are pleased to welcome Willie Gagnon from the Shareholder Education and Advocacy Movement today or MÉDAC, to present its proposals. Mr. Gagnon, I invite you to present your 7 proposals. After your remarks, we will answer questions from the meeting and put the 7 proposals to a vote. Present your proposals.

[Interpreted] Well, good morning again, Madam Chair, Willie Gagnon from the MÉDAC. And we've been a shareholder at the bank for decades, and we lived. We've existed for 30 years. We've been a shareholder for -- since the beginning. Myself have now been working at the MÉDAC for 20 years. We've met many times. You're quite lucky to have me here.

Today, there's also the TD meeting. And so it was a really heart-wrenching decision. I ultimately decided to come here. I can't be at 2 places at the same time. And it would be a good idea actually for the meetings not to take place at the same time. We can't go everywhere. I know I'm not the only one to attend banks shareholder meetings. You are -- there are only 6 of you. It should be fairly easy to hold your events on different days. I have 7 proposals, 5 which are new and 2 which I've already presented in the past. So I won't spend a lot of time on those 2 proposals. I'll focus on the 5 new proposals. The first has to do with improving shareholder participation in Annual General Meetings.

Last year, we were at a shareholder meeting, and there wasn't quorum. That is there weren't enough shareholders in attendance for the meeting to take place. It was at the Air Transat. And so that prompted us to ask ourselves a number of questions about how this could be possible. And one of the theories is that there are systemic problems and indeed, are these valid reasons. Are there systemic roots for this low level of participation?

So we looked at all the banks and all the companies where we are shareholders, and we proposed 4 different -- a series of 4 different measures. The 4 are in our proposals, most companies do, do this. But the fourth would be the publication of a small graphic or a chart where you could see whether shareholder participation is increasing or decreasing, if the participation rate of institutional shareholders is rising or falling and if the rate of participation of individual shareholders is rising or falling.

Unfortunately, the bank has not accepted to publish, and it's very difficult for an individual shareholder to get the information and publish it. And so it's just -- it's a matter of getting all the information from past meetings and then publishing this. But it's actually difficult for shareholders to get this information. We would not -- the bank -- has the bank agreed to publish this information, we would not be submitting this proposal to a vote.

The second proposal has to do with including younger generations and governance, especially at the Board, we would have accepted to not submit this to a vote if the bank had merely demonstrated that was supporting civil society initiatives where it's possible to train young people to participate in Boards of Directors. We submitted a number of programs, which organization -- nonprofit organizations have, for example, in Quebec that the bank should support young people who want to be on Boards of Directors.

And also the initiatives we created with our own employees is not enough to become directors of the bank. They come from the bank. And so necessarily, you have to support initiatives that exist outside the bank in civil society. And we would have accepted not to submit this to a vote if it had -- if we had observed that you were supporting such initiatives.

Unfortunately, it's not the case, this does not prevent you from supporting such initiatives in future, but -- so we're submitting this to vote and no matter the outcome of the vote. The third proposal has to do with responsible compensation policy aligned with performance. This is something we drafted to bring together all the proposals we've raised around compensation questions in the past. To put that in one single proposal, we would have liked to have a renewal of your compensation -- be part of your renewal of your compensation policy, but this did not happen. And so we're submitting the proposal to vote.

The fourth proposal, it has to do with the strategic diversification of skills on the Board of Directors. We would have liked to be able to observe that the bank has a process in place that can be put in place to assess the whole range of skills among Board members, especially in the context of economic crisis such as we are in. As you know, there's a trade war with the United States.

It's not me that has to tell you that there's a war underway that has a huge -- nice if there were -- if there was a one-off mechanism which existed in the bank that when able to assess and upgrade Board member skills in such circumstances. Unfortunately, this is not the case and we're submitting the proposal to a vote #5 proposal has to do with the formal recognition of the systemic role of the Board of Directors.

The bank plays a systemic role. All the big Canadian banks do play a systemic role in the Canadian economy. This is just a fact. The Canadian financial system, the Canadian banking system plays a huge role, and we asked the bank to establish an advisory body, but the bank has refused this. We're therefore submitting the proposal to vote.

As for the older proposals, you know that in the past, the proposal [indiscernible] and also an advisory vote on environmental policies is an important proposal that got almost 17% of support last year. And so we're submitting it once again. And let me just highlight that with respect to the CEO, everything in respect to the IA, the CEO spoke about this earlier, and this is also something we submitted to all the banks, but the CIBC did support the voluntary federal code. And this is an example for other -- you put this out as an example for other banks, it would be good for you to follow.

In fact, I'm curious to know if you've actually signed up for this code, whereas other banks it's unfortunate that you are unable to convince the other banks that is trying to frame the whole policies, which is an unavoidable huge question to be reckoned with today.

At the end of the meeting, I might be able to attend the end of the TD meeting. It's not because I don't have a great amount of affection for all of you here. It's because I also have to attend the TD meeting. So I call on members -- shareholders, I'm sorry, to support our 7 proposals. Thank you for your attention.

You selected to be with us here at CIBC this year. We know we've seen you for many years, and I'm sorry that you had to make a choice, but glad that you chose our bank. And we sincerely do appreciate all the comments, all your feedback, all your engagement and our ongoing discussions that we have with you, Mr. Gagnon, over the years. We're not always aligned on everything, but the topics you raise are important to us. We listen to you, and we do take the feedback. And I do think it helps us move the bank ahead.

So the floor is now open for comments or questions on shareholder proposals 1 through 7. Natalie, anything from the webcast?

There are no comments or questions.

[Interpreted] The Board of Directors and management recommend that shareholders vote against each of these shareholder proposals for the reasons set forth in the circular. Please vote on shareholder proposals numbered 1 through 7. Please note that if you voted in advance prior to the meeting and do not wish to change your vote, you do not need to take any action at this time.

Please the matters to be voted upon. I'll pause for a moment so that shareholders and proxy holders can finish voting.

[Voting]

The polls are now closed. For those in the auditorium, please pass your ballots to the center aisle for collection by the scrutineers. Please ensure your name is clearly printed on your ballot together with your signature. Could the ballots please be collected? Great.

Great. I'll now invite Gina Pappano of InvestNow to comment on their withdrawn proposal. Welcome, Gina.

Thank you. Good morning, and thank you for the opportunity to speak about InvestNow's withdrawn shareholder proposal. We ask the bank to return to viewpoint neutrality in their business practices and to put fiduciary duty to their shareholders first. But after submission, it was argued from some of the banks that the language of our request was at odds with the requirements of the Bank Act, which stipulates that decisions must be made in the best interest of the bank itself and its shareholders.

Point taken. So in these remarks, we are asking the bank to return to viewpoint neutrality in their business practices and to put fiduciary duty to the bank and its shareholders first. Banks are essential institutions for participating in modern life. Without a bank account, it is difficult to play any part in our society. Banks, therefore, must be truly inclusive institutions, and that means that they should be held to a standard of strict viewpoint neutrality, looking after the interest of their clients in a nonpartisan, non-ideological way.

So long as the bank's clients are abiding by the law, banks should be open to all potentially profitable businesses for the good of the bank, its shareholders and the health of the economy. But over the past decade, maximizing financial returns to shareholders has increasingly taken a backseat to the pursuit of environmental, social and ideological goals.

Along with other fiduciaries like corporations, public pension plans and university endowment funds, Canadian banks have placed ideological goals like decarbonization, net zero and energy transition above returns. Since 2022, we have presented shareholder proposals to the big 5 Canadian banks to counter these prosperity destroying campaigns, whose ultimate objective is to shut down Canada's oil and gas industry. Our goal has always been to prevent the banks from giving in to political and ideological pressure and becoming complacent in schemes to undermine Canada's energy sector.

Banks hold a government charter to conduct banking. That charter grants a privilege, but it also comes with responsibility to stay focused on the purpose of banking. As customers and as shareholders of the banks, we need to hold the banks to account for any activity that strays from the business of banking. Thank you.

Thank you, Ms. Pappano, and for InvestNow's continued engagement with our bank. At this time, I invite shareholders and proxy holders with a question or comment about CIBC and its business to submit your questions.

For those shareholders and proxy holders in the room, please approach one of the microphones, state your name and indicate whether you're a shareholder or a proxy holder. If you're attending through the webcast, you can submit your questions by selecting the messaging icon at the top of your screen. Type your message within the text box. Please state your name and indicate whether you're a shareholder or proxy holder. Once you finish typing your question, click to submit.

And now I'll take questions, starting with those in the room, and then I'll move to those online.

Natalie, I'll move to those questions online, please.

Yes. We have 3, Kate. The first is from [ Hari Rathnam ], who asks, how does the bank ensure that the auditors have adequate experience in financial institutions before appointing or reappointing them?

Good question. Thank you for that question. Having an experienced external auditor and internal auditor, but external auditor is very important to us and very important to our shareholders. To that end, we do an annual assessment at our Audit Committee on the auditor's effectiveness.

We also every 5 years, do more in-depth comprehensive analysis on the auditor's independence, the audit quality, effectiveness and the service quality. And so all -- actually, we did this comprehensive review just this past year in our Audit Committee, which resulted in the Audit Committee recommending that we reappoint our auditor, EY, which has tremendous depth of experience, including in the financial services space. So we're very pleased with our auditor. Thank you. Next question.

The next question is from a shareholder named [indiscernible]. The question is -- it's a lengthy one so I will just read it out. CIBC's exposure to financial loans is about 10% of total gross loans, amongst the highest for Canadian banks. In light of regulatory concerns around private lending, please provide, first, a breakdown of this 10% exposure between lower-risk subscription lines and higher risk private credit or buyout financing; and second, an overview of how CIBC is stress testing its risk protections such as synthetic risk transfers with nonbank entities?

Okay. Thank you, Natalie, for conveying that question, which is topical in today's environment. And certainly, our bank is very focused on managing our exposures in a very disciplined way.

I'll turn this over to Harry Culham to answer.

Thank you, Kate, and thank you for the question. The first thing I'd say, you have asked for a breakdown of the portfolio. Our lending book is well diversified. The credit quality is very strong. I spoke in our remarks around -- my remarks around a robust balance sheet, and we believe in that. We provided a breakdown in our fixed and our financial institution lending exposure in our most recent disclosures around 3 categories. This is our quarter 4 '25 presentation.

The loans are almost evenly split between collateralized finance, traditional bank lending and capital call facilities. It's a high-quality book of business run by a very experienced group of team members, and we are very comfortable with the exposure. We do run regular stress tests. We stress test as part of normal course risk management. We do have a stress test scenario on our private credit portfolio, and we even tested severe stress levels and losses were immaterial.

Very thorough answer. Thank you, Harry. Natalie, next question.

This is a second question from [ Hari Rathnam ], who's a shareholder. Could you share how the Board is ensuring CIBC is prepared to meet its OSFI B-15 governance and disclosure requirements?

Okay. Thank you, Natalie. For those that may not live this every day, they may not know what OSFI B-15 is, but it is related to climate. And the first thing I would just say is that we recognize as a bank, the importance of climate change. We recognize that we have a role to play, particularly with our clients in helping them transition over time to a low-carbon future.

As far as OSFI guideline B-15, we just recently produced a sustainability report, and it goes into quite a lot of detail on this in terms of what our governance framework is, what the Board responsibilities are, what management responsibilities are. And there's actually even an index that's called the B-15 Index, which identifies all the different specific disclosures and actions that are required and how we're fulfilling those. So quite fulsome. And I would just say that we'll follow regulatory developments as they unfold over time. Next question?

There are no further questions on the webcast, Katy.

Any further questions from the room? Great. Well, thank you, Natalie, and thank you to all of you, particularly those that you made an effort to come in person. Thank you to all our shareholders and proxy holders for your questions and comments. Your participation in this meeting is really important, and we appreciate it. And given there are no more questions, we will move to get the vote results next. I've been advised that the scrutineers have their preliminary report ready.

Natalie, would you please read the scrutineers' report?

I would be pleased to. Thank you, Kate. The scrutineers report that 50.68% of eligible shares have been voted at this meeting. The shareholders who voted by proxy or online ballot have voted as follows: On the election of directors, a substantial majority of the votes cast at the meeting were voted in favor of each of the 13 nominees named in the management proxy circular. On the appointment of auditors, 90.24% for, on the advisory resolution regarding our executive compensation approach, 95.59% for; amendments to CIBC's employee stock option plan, 95.97% for.

On shareholder Proposal 1, improving shareholder participation in Annual General Meetings, 1.32% for; Shareholder Proposal 2, including the younger generations in governing bodies, 2.07% for; Shareholder Proposal 3, responsible compensation policy aligned with performance, 6.96% for; Shareholder Proposal 4, strategic diversification of skills on the Board of Directors, 11.5% for; Shareholder Proposal 5, formal recognition of the systemic role of the Board of Directors, 8.8% for; Shareholder Proposal 6, public disclosure of nonconfidential information, country-by-country reporting, compensation ratios and tax havens, 9.95% for; and finally, shareholder Proposal 7, advisory vote on environmental policies, 17.84% for. Kate, that concludes the report.

Great. Thanks, Natalie. Based on the vote results, I declare that each of the 13 nominees named in the 2026 management proxy circular is elected as a director of CIBC until the close of the next Annual Meeting of Shareholders or until their successors are elected or appointed, whichever is earlier.

Ernst & Young LLP is appointed as auditors of CIBC. The advisory resolution regarding our executive compensation approach is approved. The resolution to amend CIBC's employee stock option plan is approved. The special resolution to amend bylaw #1 regarding directors' remuneration is approved. And shareholder proposals 1 through 7 are not approved. We thank you for your votes today. The final vote results will be available after the meeting. We truly appreciate your interest in our bank.

And on behalf of our Board, I would like to thank you very much for taking the time to join us today. I now declare the meeting terminated. Thank you all.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good morning, and welcome to the CIBC First Quarter quarterly results conference call. Please be advised that this call is being recorded.

I would now like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations. Please go ahead, Geoff.

Thank you, and good morning. We will begin this morning's call with opening remarks from Harry Culham, our President and Chief Executive Officer; followed by Rob Sedran, our Chief Financial Officer; and Frank Guse, our Chief Risk Officer. Also on the call today are a number of our group heads including Christian Exshaw, Capital Markets, Kevin Lee, U.S. region, Hratch Panossian, Personal and Banking, Canada and Susan Rimmer, Commercial Banking and Wealth Management, Canada. They're all available to take questions following the prepared remarks.

As noted on Slide 1 of our investor presentation our comments may contain forward-looking statements, which involve assumptions and having inherent risks and uncertainties. Actual results may differ materially. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. Management measures performance on reported and adjusted basis and considers both to be useful in assessing underlying business performance.

With that, I will now turn the call over to Harry.

Thank you, Geoff, and good morning, everyone. We are pleased to start the fiscal year on strong footing with exceptional first quarter results. Our performance was driven by our team's collective focus on accelerating our proven client-focused strategy and unlocking further value through disciplined execution.

Before I comment on our quarter 1 results, I want to offer some perspective on how our clients are managing through today's dynamic environment. We are staying close to them as they navigate a fluid operating backdrop with heightened focus on trade developments and geopolitical tensions. For my conversations with CEOs and industry leaders over the past few months, clients are generally managing near-term uncertainty well and remain optimistic about the longer-term.

Our roots as the Bank of Commerce are very relevant today. Our bank was formed in 1867 to help capital flow to businesses that we're building our nation. Today, we stand ready to help our clients advance their agendas, including key infrastructure initiatives. We have a long history of being a trusted partner to the businesses and families we serve, and we remain focused on helping them grow in 2026 and beyond.

Now turning to our quarter 1 results. On a reported basis, earnings per share of $3.21 were up 47% from the prior year and included income tax recoveries, which we have treated as an item of note. The remainder of my comments will focus on adjusted results. We reported adjusted earnings per share of $2.76, which were up 25% from the prior year, driven by a robust top line. Revenues of $8.4 billion were up 15% from the prior year. Importantly, our revenue growth is well diversified with record revenues across each of business units. Expenses were up 12% from the prior year. We delivered operating leverage of 3.6%, marking the tenth consecutive quarter in which we delivered positive operating leverage. Our critically remains resilient.

Provisions for credit losses this quarter were largely aligned with our expectations. We continue to proactively stress test our portfolio for a wide range of scenarios to ensure our bank can navigate all market conditions. We are well prepared should we see a downturn in the environment while also being well positioned to grow with our clients.

Our return on equity was 17.4% this quarter on the foundation of a robust 13.4% CET1 ratio. We returned roughly 78% of earnings to shareholders in the first quarter in the form of dividends and 8 million common share buybacks. These results reflect our unwavering commitment to delivering sustainable value for our shareholders and maintaining a solid foundation for future growth.

Let me provide some highlights across each of our 4 strategic priorities that underscore the momentum we've achieved across our bank. Our first strategic priority is to grow our mass affluent and private wealth franchise. Across our managed mass affluent offering, we are connecting clients with dedicated advisers to help them achieve their goals. However, simple or complex. It's clear that this approach is working.

Managed clients in Personal Banking are generating roughly 4x the revenue of an unmanaged client with Net Promoter Scores that continue to hit all-time highs. Within the past year, qualified clients in our managed offering grew by 6%, helping deliver money and balance growth of 12%. And from here, we are prioritizing client acquisition and growth with key client segments. We are also unlocking efficiencies to scale adviser capacity with mass affluent clients per adviser up 7% from the prior year.

Our second strategic priority is to expand our digital-first personal banking capabilities. 48% of our retail products sold during the first quarter were through digital channels. That's up 5% from the prior year. As we implement continued enhancements through digital, we're putting more power in the hands of clients to deepen their relationships with our bank.

We're also equipping our advisers with digital tools to create efficiencies for them, enabling them to spend more time with clients. Our third strategic priority is to deliver connectivity and differentiation to our clients. We built a highly connected culture that drives steady referral business across the bank, supported by an innovative suite of products designed to deepen relationships with our client base.

Record revenues in Canadian Commercial Banking this quarter were fueled by single-digit volume growth on both sides by high single-digit volume growth on both sides of the balance sheet, robust margin expansion and strong connectivity across our teams. That collaborative momentum is also fostering greater cross-business engagement. This quarter, our Capital Markets platform captured elevated volume from client-driven demand, complemented by healthy referral activity from our Commercial and Wealth businesses.

Earlier this month, we confirmed our role as a partner of the Defense Security and Resilience Bank Development Corp Group. As new opportunities emerge in Canada's key sectors, we are ready to work alongside our clients and industry leaders.

Our fourth strategic priority is to enable, simplify and protect our bank by investing in technology, data and AI to drive operational excellence and further modernize our bank. We frame AI value through 3 pillars: revenue growth through better client experiences, operational efficiency and risk mitigation.

These pillars guide where we invest and how we prioritize use cases. From a revenue perspective, these capabilities are enabling us to engage clients more intelligently, bringing the right insight adviser offer at the right moment. We're also using AI to accelerate and improve the consistency of credit decisions, supporting growth while maintaining discipline.

On efficiency, we're simplifying our bank by reducing manual and repetitive work, so our teams can focus on higher-value activities. This includes automation, faster issue resolution and meaningful productivity improvements for our technology teams. And from a risk perspective, AI is helping protect our bank by strengthening fraud prevention, credit monitoring and AML functions. We've deployed these capabilities with governance built in from the start, ensuring transparency, control and regulatory alignment.

Culturally, we see AI as an opportunity to rethink how work gets done, not just to automate existing processes. Our teams are encouraged to challenge legacy workflows, supported by training and clear policies for responsible AIUs. Having every CIBC team member doing this will propel us forward not just today, but also with future upcoming technologies. Rather than leading with a single enterprise value number, we focus on what is observable and repeatable such as scaled adoption, operational outcomes and improved risk performance. Over time, these benefits flow through to revenue, efficiency and returns in a disciplined and sustainable way.

In closing, the positive momentum across our bank continues to build. We're focused on accelerating our execution in 2026 to drive robust, well-diversified growth by proactively preparing for uncertainty and staying close to our clients, we are well equipped to successfully navigate evolving market environments.

And with that, I'll now turn it over to Rob for a deeper look at our financial results. Over to you, Rob.

Thank you, Harry, and good morning, everyone. Let's start with 3 takeaways. First, the year is off to a strong start with another record earnings quarter and an ROE that was well above our current medium-term target. Second, the strong and broad-based revenue growth and solidly positive operating leverage reinforce our confidence in our strategy and demonstrate our focus on disciplined execution. And third, helped by strong reported earnings, our CET1 ratio edged higher even as we accelerated our capital return strategy by repurchasing 8 million shares during the quarter.

Please turn to Slide 8. For the first quarter of 2026, earnings per share were $3.21 and included income tax recoveries, which we have treated as an item of note. Absent that, our effective tax rate was in line with expectations. On an adjusted basis, EPS was $2.76, up 25% from a year ago. Adjusted ROE was 17.4%, up 210 basis points from the same quarter last year.

Let's move on to a detailed review of our performance. I'm on Slide 9. Adjusted net income of $2.7 billion increased 23% and pre-provision earnings were up a strong 19%. Revenues benefited from balance sheet growth, improving net interest margins and higher fee income. We continue to manage expenses prudently relative to revenues, delivering 360 basis points of operating leverage. Impaired losses were within our guidance range. Frank will discuss credit in his remarks.

Please turn to Slide 10. Excluding trading, net interest income was up 13%, with continued balance sheet growth and expanding margins. All bank margin ex trading was up 17 basis points from the prior year and 6 basis points sequentially due to a combination of higher deposits, business mix and improved product margins. Those same factors drove Canadian P&C NIM of 300 basis points, which was up 10 basis points sequentially. In the U.S. segment, NIM of 401 basis points was up 17 points from the prior quarter due to continued strength in deposits, which was partially seasonally driven. After accounting for the seasonal drag on margin, we often see in Q2, we maintain our expectation of a stable to gradual positive bias on our net interest margins over time.

Slide 11 highlights fee revenue trends. Noninterest income of $4.1 billion was up 18% with growth across payments, institutional, trading and consumer fees. Market-related fees also increased 18%, helped by constructive markets with particularly strong growth in trading, underwriting and advisory and mutual fund fees. Transaction-related fees were up 10% driven mainly by higher credit and FX fees.

Slide 12 highlights our expense performance. Expenses were up 12%, driven by increased business activity, revenue-linked costs and technology investments across our bank. These expenses were paced relative to the robust revenue growth, and so we once again delivered positive operating leverage.

Slide 13 highlights the consistent strength of our balance sheet. Our CET1 ratio at the end of the quarter was 13.4%, up 5 basis points from the prior quarter. We delivered strong organic capital generation, helped by strong reported earnings, partially offset by an increase in risk-weighted assets and the accelerated share buybacks.

As a reminder, and as we disclosed last quarter, we will see a roughly 30 basis point benefit to our CET1 ratio in Q2 related to a reduction in operational risk weights. Our liquidity position is very strong with an average LCR of 133%.

Starting on Slide 14. With Canadian Personal and Business Banking, we highlight our strategic business unit results. Adjusted net income growth of 25% and pre-provision earnings growth of 19% were revenue-driven. Revenues were up 13%, helped by margin expansion, loan growth and higher fee-based revenue. Net interest margin was up 34 basis points year-over-year and 9 basis points sequentially. We continue to see tangible results from our focus on deep and profitable client relationships, selective balance sheet deployment and disciplined pricing decisions. Expenses were up 7%, mainly due to higher spending on technology and other strategic initiatives and higher employee-related compensation.

On Slide 15, we show Canadian Commercial Banking and Wealth Management, where net income and pre-provision pretax earnings were up 9% and 16% from a year ago. Revenues were up 13% from last year. Commercial Banking revenues were up 9%, driven by volume growth and margin expansion. Commercial loan and deposit volumes were up 7% and 8%, respectively, from a year ago. Wealth Management revenue growth of 16% was driven by higher average fee-based assets and increased client activity driving higher commissions. AUA and AUM were up 14% and 15%, respectively, compared with Q1 of '25.

Turning to U.S. Commercial Banking and Wealth Management on Slide 16. Net income was up 19% from the prior year, mainly due to lower loan loss provisions and pretax -- pre-provision pretax earnings that increased 7%. Revenues were up 6% from last year. Net interest income was up 10% from improved loan and deposit growth and wider deposit margins. Fee income growth was impacted by lower annual performance fees in our Asset Management business. Expenses were also up 6% due to higher employee compensation, including costs related to severance and strategic initiatives.

Turning to Slide 17 and our Capital Markets segment. Net income was up 42% and revenues were up 28% year-over-year. Global Markets revenue saw growth across most products. Investment Banking benefited from higher underwriting and advisory activity and Corporate and Transaction Banking revenues were up due to volume growth and higher fees.

Slide 18 reflects the results of Corporate and Other, which was a net loss of $100 million compared with a net loss of $60 million in the prior year with both revenues and expenses influenced by some unusual items this quarter.

In closing, we generated strong revenue growth, delivered positive operating leverage, returned significant amounts of capital to shareholders and strengthened our balance sheet. A strong start to the year.

With that, I'll turn it over to Frank.

Thank you, Rob, and good morning, everyone. Through the first quarter of 2026, our credit portfolio performance has remained aligned with our expectations given the fluid operating environment. Mid ongoing tariff-related headwinds and negotiations, we remain vigilant and proactive in managing our credit portfolios to address both expected and unexpected changes. Our increases in allowances over the past 12 months and show a strong coverage against the economic environment, and we maintain a high level of confidence in the overall quality and stability of our credit portfolio.

Turning to Slide 22. Our total provision for credit losses was $568 million in Q1, down from $605 million last quarter. Our allowance coverage remains robust at 79 basis points. Our performing provision was $48 million this quarter, reflecting the impact of credit migration and the evolving economic environment. Our provision on impaired loans was $520 million, up $23 million quarter-over-quarter. Higher provisions in our Canadian and U.S. Commercial Banking segments were partially offset by lower provisions in Capital Markets and Canadian Personal and Business Banking.

Turning to Slide 23. In Q1, impaired provisions moved slightly higher with the impaired loss rate at 35 basis points. Impaired provisions in Canadian Personal and Business Banking and Capital Markets were down this quarter. Canadian Commercial Banking impaired was up in Q1, driven by losses across unrelated sectors. The losses in this portfolio are attributable to a small number of impairments, and the overall portfolio remains strong, and we do not expect losses to remain elevated to this degree through the balance of the year. Impaired provisions in U.S. Commercial Banking were up in Q1, but remained lower compared to the same period last year.

Slide 24 summarizes our gross impaired loans and formations. Our gross impaired loan ratio was 64 basis points, up 3 basis points quarter-over-quarter. New formations were down in Q1, with a decrease in business and government loans, partially offset by an increase in consumer loans. While the impaired loan ratio on mortgages increased modestly this quarter, given continued softness in the housing market, our loan-to-value ratio for the mortgage book remains strong at 57% for the overall book and 68% on impaired balances. Overall, we do not expect material loss -- material increases in losses within our mortgage portfolio.

Slide 25 outlines the 90-plus day delinquency rates and net write-offs of our Canadian consumer portfolios. The 90-plus day delinquencies in our Canadian consumer portfolios increased quarter-over-quarter primarily reflecting the current macroeconomic backdrop. Our consumer net write-off ratio increased modestly, mainly driven by the credit card portfolio, which continues to be affected by elevated unemployment and ongoing economic uncertainty. While we closely monitor evolving economic conditions, we remain confident in the overall strength and stability of these portfolios, which are aligned with our client-driven strategies.

In closing, while impaired loan losses were slightly higher in Q1, our credit performance remains stable and resilient, reflecting our prudent risk management and disciplined portfolio oversight. We will continue to foster strong client engagement and proactively assess our portfolios, ensuring they remain robust amid the evolving market conditions. Our strong allowance levels continue to provide prudent coverage for changing economic conditions. And notwithstanding the higher impairments in our Commercial Banking portfolios this quarter, we remain comfortable with our full year guidance.

I will now ask the operator to open the line as we welcome your questions.

[Operator Instructions]

Our first question comes from Ebrahim Poonawala with Bank of America.

I guess maybe first question for you, Harry or Rob. When we look at sort of the margin expansion that occurred this quarter and just the overall profitability, I think the ROE at 17.4%, appreciating, we can't run rate 1Q as the go-forward ROE profile. But just talk to us as we think about over the medium term, like why commerce, even with the 13.5% or higher CET1 should not earn somewhere between a 16% to 17% ROE and if the capital ratios were to decline, maybe even better. Like what would be the argument against that statement?

Ebrahim, nice to hear from you. I'll kick it off and maybe I'll pass it over to Rob in a moment. But the first thing I'd say is that our strategy has been consistent, and we believe we have unique competitive advantages that really position us well to deliver profitable growth. We target the right client segments where we can deepen relationships and be meaningful to our clients. We have the right product focus. If you think about deposits, investments, transaction accounts across each of our businesses, we have the right technology.

As I mentioned earlier, we've invested in AI-enabled technology and perhaps you'll hear from Hratch later around what he's doing in the retail space because it's excellent. And we have the right culture, our team members are focused on delivering the entire connected bank to our clients. And so we're very confident in our ROE trajectory and that journey that we're on. And maybe, Rob, if you want to quantify some of the drivers, that would be great.

Yes. Thanks, Harry, and Ebrahim, last quarter, we guided for the full year that we'd be above 15%. And I would -- obviously, the year is off to a very strong start. We're less worried about a specific target, though we do acknowledge the need to refresh our target. But as I said last quarter, when we talked about '26, once we cross 15%, it's not like it was mission accomplished for us. As Harry said, we think we've got the right strategy, the right investments, the right technology and the right people to drive what we think is a premium ROE, right?

So we expect to continue to move this higher. And it's based on, to your point, the current level of buyback, the current capital levels, we're not doing anything particularly unnatural to get there. But I do want to maybe just stop for a second and talk about how we get there matters to us. Like we talk a lot about disciplined execution.

The other word we use a lot around here is the word balance, right? And so when we think about where ROE is, we also think about it in the context of earnings per share growth. We're not over-rotating to ROE at the expense of earnings growth. Like there's a lot of unnatural things you can do to try to get your ROE higher in the short-term. That balance to us means over time, we can get both the earnings growth and the ROE expansion. And it's something that we've been doing rather successfully over the last little while.

So our focus is on controlling what we can control and keep doing what we've been doing. We think that means the ROE is going to continue to move higher over time.

Understood. And maybe, I guess, question for Hratch. I mean we've not seen this play out in the Canadian banks as much, but there's been obviously a lot of concern around AI, AI disruption risk. Perhaps you spent a lot of time around just the consumer franchise thinking about this.

One, talk to us kind of your perspective on how you think about the opportunity versus the disruption risk for consumer deposits and banking and then maybe just your strategy as you kind of leading the business?

Yes. Thank you, Ebrahim. Thanks for the question. And look, I think the short answer is we think it's an opportunity as with any other technology, the way we look at it is how do we adopt the available technologies that are emerging in order to further our business strategy.

And keying off a bit of what Rob was saying, right, our business strategy in retail is to continue to generate value for all of our stakeholders. That's how we believe the balance is achieved. And you're seeing that in the results, like I will say, very proud of what the team has delivered once again at 13%. Growth is there, top market revenue growth. But at the same time, after several years, we're inching back to the 30% ROE level. And I think that's because of everything that we've done in the business and we'll continue to do. So on the AI front, it does support our strategy. As we've talked about before, we've been very, very focused on where we're trying to grow and create differentiation.

In the retail business, there's 3 priorities for us, lead in every day banking solutions for all of our clients, lead in investments and advice in the mass affluent segment and continue to drive the efficiency and simplification of our business, which benefits both our team and how easy it is for them to do their work as well as the shareholders through the efficiency. And we've been using, frankly, AI. You saw Harry's slide at the enterprise level. We've been using AI across all 3 of those things.

But maybe one example I can give you, which I think is a good one that cuts across all of them is our Cortex platform that was referenced on the slide before. And the reason I think this is a good one, it actually highlights that AI itself and a lot of the attention there is right now on models and LLMs and some of our peers talk a lot about that. But the differentiation isn't really in the models. It's about how you build your business processes and change your business model to actually leverage what AI can do. And some of that is built on years of foundational investments. So Cortex is built on foundational investments in the quality of our data that we've made for many years.

Foundational investments in our eCRM platform, which cuts across all of our channels, whether it's the front line and the branches, the contact centers or digital, foundational investments in our martech stack as well as many others. And now what AI allows us to do is to use some traditional, I'll call it, machine learning models to begin with in Cortex to allow us to understand on a personalized level, what clients need, get that to the right place, whether that's the digital channel or our advisers to be actioned and start leveraging even LLMs on top of that to help our advisers prepare for that conversation. And over time, even having a conversational interfaces to bring that LLM interface to clients directly.

And we're also building Agentic flows on top of that to start processing things in the back end for our clients. And so when you put all of that together, we focused Cortex particularly. We launched at the end of last fiscal. This quarter, we focused particularly on the savings side and deposits. And what we're seeing is that 44% conversion rate uplift that you see there. That's relative to controls if we didn't follow the personalized approach that Cortex allows us to do.

And that's just the beginning. We're going to rise from there. And again, if you look at the impact of that in units for the first quarter in the products that we applied the Cortex use cases to about 10% of unit sales actually came out of Cortex results.

Our next question comes from the line of Matthew Lee with Canaccord Genuity.

I know, Rob, you gave some color on NIM, but I just want to maybe understand how much the quarter-over-quarter expansion in Q1 was seasonality versus some of the deposit portfolio benefits and other? And then how much of a reversion should we expect throughout the year?

Matthew, it's Rob. So I've often spoken in the past about the margin in 3 main buckets, right? There's the hedging and positioning, the so-called tractoring strategy, there's business mix and then there's the product margin, which kind of reflects the competitive environment. And I would say this quarter, the margin uplift has been about 1/3, 1/3, 1/3 roughly in those 3 categories. The hedges work, they do what they're going to do. The tractoring strategy will continue to roll on as we've discussed in the past. Mix was positive and both from a deposit volume perspective and a deposit mix perspective. So a little bit more noninterest-sensitive deposit, a little bit less term product and this deposit volumes were strong as they often are, particularly in the commercial businesses.

Now in terms of going forward, often what we see -- and you saw it last year in Q2 as well, where we had a sequential downtick in net interest margin. There's some seasonality to it. I mean checking accounts tend to go down a little bit. Credit card balances tend to go down a little bit, Those commercial balances roll off, again, just seasonally as some of the -- some of our commercial clients are using funds for whether it's bonus payments, tax payment, restocking inventory, all kinds of reasons. So last year, we saw a slight downtick in Q2 as well. It wouldn't surprise me if that happened again this Q2. But the overall margin story otherwise continues to be that stable to gradual increase that we've been guiding to over time.

Okay. So when we say stable NIM, it's kind of stable from the Q1 levels?

Yes. Like I said, beyond factoring in potential seasonality in Q2 where it might give back a basis point or 2. The story beyond that is to continue to move stable to gradually higher.

Our next question comes from the line of John Aiken with Jefferies.

Frank, when I take a look at the 90-plus day delinquency rates in the Canadian portfolio, I understand that your confidence in terms of your own portfolio, your credit adjudication and everything else like that. But when I look at the upward trend in these numbers, how concerned should we be? Do you think that we're at or near a peak in terms of these levels? Do we think they may actually inflate a little bit more? And what do you think the impact could be in terms of your broader portfolio?

Yes. Thank you, John, for the question. I do believe there is also some seasonality in those numbers, say, in particular, if you look into the credit cards that usually tend to be a little higher in the Q1 pattern given the seasonal patterns there. But overall, I would say those numbers actually fairly well reflect our expectations against the ongoing macroeconomic backdrop. So that is why we do feel very confident with our guidance given because that would be included in those expectations. And I mean, we are seeing still some ongoing, I would say, softness in the economy. We have seen unemployment going up, going down a little bit, but having to a certain extent, plateaued. We do have the USMCA negotiations coming our way. So there's some uncertainty still ahead of us. But I'm not overly concerned with those numbers. We have the right strategies underneath both from a business perspective and from a risk management perspective to manage those portfolios very proactively. And as I said at the beginning, those broadly expect -- reflect our expectations that we had going into the quarter as well.

And if I could, Rob, you to make some commentary about service in Caribbean, where it actually does look like the gross impaired loans are heading in the right direction. Is there anything you can comment about that region?

No. I mean they are headed. As you said, there is a little bit of a trend there, but nothing really to call out.

Our next question comes from the line of Doug Young with Desjardins Capital Markets.

Just wanted to go back to Harry. I think you said 10 consecutive quarters of positive operating leverage. Just looking at your expense ratio, it's improved quite a bit. Maybe can you unpack a little bit about what you're benefiting from maybe Harry or Rob, what could throw a wrench into this?

And then Hratch, maybe if you can kind of tag in, like it looks like you brought your expense ratio down in Canadian Personal and Small Business Banking quite a bit. Like how do we think about it going forward?

Doug, It's Rob. Maybe I'll get started. And we -- the revenue visibility has been pretty good for us over the last little while. And so we've taken the opportunity to advance some spending that otherwise might have happened later this year or even next year to bring it forward a little bit and invest in future growth, right? So aside of the fact that revenue-linked expenses have also been rising, we've been managing that revenue to expense gap fairly well. And that's just how we think about our expense outlook. We do like to have that positive operating leverage. We're not going to -- we target it every quarter. We're not saying we're going to deliver it every quarter. It's nice to have a 10-quarter winning streak for sure, and we intend to continue it.

But we do target on an annual basis. And with the environment that we've had, our expense in terms of absolute dollar or absolute percentage has been a little on the higher side, but it's been conscious and intentional spending to advance the priorities of the bank. So when we look forward, if revenue were to slow from here, we're confident that we have the levers to pull back some of that spending to maintain that operating leverage gap.

Maybe I'll hand it over to Hratch for the second part of your question.

Yes, sure. Thanks, Doug. Look, it's an area of focus for us, right? We talk about the bank-wide operating leverage. But as you see in the trend, the same applies in the retail business. So our approach has been all along to try to grow our revenues in that 7% to 10% plus range that we've targeted and we've exceeded that and to generate positive operating leverage on top of that. And how do we do that?

It's focusing on scaling the businesses where we already are carrying some of the expenses on and we've done a good job of doing that as we scale and take advantage of a lot of the investments we've made over the last while. But even without the revenue side, I think the expense side is something that we've been very sharply focused on. And we're applying the same approach in retail as we do elsewhere in the bank. We have to continue investing in the business.

And what you do over time is you create a flywheel of you make the investments and a lot of the investments are also driving efficiency on the cost side and time of our team side. And that allows you to increase productivity, and that makes more room for us to invest in, so we can continue investing while keeping expenses more modest. And so I think for the rest of this year as well, you will see over the years, some of our expense growth moderate without our investment levels going down, actually continuing to increase. And part of it is we could talk about AI here as well and automation, but I think there's a lot of opportunity for us over time. If I touch just on our front line, who is a big part of the resources that we have at our disposal.

We set a goal a couple of years ago to try to get to 1 million hours saved for the front line through automation and some of the new use cases and they're now Gen AI as well, and we reached that goal this year, a year ahead of schedule. We've now looked at multiples of that going forward to create more hours for our team, as Harry referenced in his remarks to spend time with clients.

And so we're seeing the number of meetings with clients, the number of hours with clients each adviser is spending or each front line person is spending go up. We're doing the same thing with several use cases in our contact centers, where AI is allowing us to either divert calls, take calls through our AI voice bot that we've highlighted in the results or when a human has to pick up the phone. We've got some workflows in the back end that are leveraging AI that also help them. And I think there's efficiency there. And then there's the back end.

We're looking at a lot of our processing of products, whether it's origination or servicing as I spoke about before. And I think what the Agentic workflows you can create today allow you to do is to create far more automation, which is good for everybody. It's good for clients. It's good for our team, not having to handle some of those exceptions and it's good for the shareholder and it's good for operational resilience, frankly, from a regulatory perspective.

So I think all of that creates opportunity to continue generating positive operating leverage, which we will continue to focus on and to continue getting that mix ratio to a better and better place. And obviously, ROE continuing to trend to the 30% level it is now and higher.

So just one follow-up for us. Like where do you think you can take that expense ratio?

I think, look, in the long-term at this point, I'll say directionally, we'd like to see it trend downwards. And we've talked about the business, and we think the potential of our franchise is to continue to grow above market, which we have been doing and continue to take the profitability metrics, whether that would be the mix ratio or the ROE to a premium level relative to the peer group. So I think we've got some room to go.

Our next question comes from the line of Mario Mendonca with TD Securities.

Maybe this is for Rob. Could you help me interpret Slide 33. Is it a -- I'm talking about the interest rate environment where you show us the roll on and the roll-off rates? Is it as simple to suggesting that this chart will not change. If everything were static, that the margin expansion continues through to 2026, the end of '26 and even maybe in the first half of '27, and those 2 lines cross and it comes to an end. Is it really that simple?

Well, Mario, yes, I mean, listen, when you think about the part of the margin expansion story that has been related to the balance sheet positioning, I mean, yes, it pretty much is that simple. By the time we get into middle of '27, you can see those lines start to intersect and it becomes more of a neutral. And that's based on the current forward curve, right?

But based on the current forward curve, you can see that benefit start to slowly migrate towards neutral in '27. Now the other things that have been driving the margin, whether it's business mix and the focus on what we're doing in the retail bank to focus on bringing the money in like the deposit side, all of those things should continue to benefit the net interest margin beyond that period. But the structural benefit we've been seeing does start to roll off in '27.

It sounds like a little bit of a softball, but why is it that -- why has CIBC led the group in the last, say, 2 years, maybe 18 months in margin? I obviously compare all bank margin CIBC to the peers. And the gap is significant. I know you don't sit there worrying about what Royal is doing, but why would that margin be so much greater, the margin expansion be so much greater for CIBC than peers?

Well, I'll try to handle softball notwithstanding. I'll try to handle it in a way that speaks more about what CIBC is doing rather than what others might be doing. We do manage for margin stability as best we can over time, which means that this benefit from the higher interest rates is bleeding in slowly. I can't speak to what the others have done or didn't do. But that benefit has been rolling in over time. And you've heard Hratch speak repeatedly on these calls about how we're looking at the mortgage business and how we're looking at our business mix generally in retail and where we're focused, those transaction accounts, the credit card businesses, the checking and savings accounts being more of a focus than say, the mortgage business has been helping the margin. And particularly in a period where mortgages haven't been growing very rapidly, it's been NII accretive as well. So for us, it comes down to executing on that treasury strategy of maintaining margin stability over time. And then the business strategies have been focused in the right areas, and we're going to continue to focus that way.

Last softball question, and I'll stop. We're still seeing this very, very strong growth in the financial institutions like the business and government lending. When you talk about what is CIBC up to there? And the reason I'm being so direct in asking the question is -- this is -- this pattern is familiar to me. Not for CIBC necessarily, but it's familiar to me in the Canadian banks where a particular lending loan category grows much stronger than peers. And 2 years later, we're all talking about what went wrong. So maybe just talk about where this financial institutions group growth is coming from? And how do you get comfortable this isn't going to be a sad story 2 years now?

Mario, this is Christian. So let me, I would say, try to unpack this. And I thought we actually spoke about it on last call. So if you look at that line item, we actually grew dramatically, I would say, in the second half of last year. And what we're trying to do now, as I said on last call, is to moderate this growth.

So whilst the growth year-over-year is substantial, if you were to look at it on a quarter-over-quarter spot basis, then that growth is moderated to roughly 2%, which is in line with what I said, which was high single digit by the end of this fiscal.

This is a business we're very comfortable with. It leads to a number of other products that we can market with those clients. We discussed the business consistently with our colleagues in risk management, just to make sure that as you said, we don't have any issues going forward. We're not in the storage business, we are in the moving business. So there's a lot of velocity in some of these books. So we're very comfortable with the risk. But I'll probably pass on to Frank, if Frank has anything else to add.

Yes. Thank you for the question. And as Christian said, I mean, we do feel comfortable with the books. We have the right guardrails in place. We have the right strategies in place on how we think about the various businesses that actually fit in our financial institutions line and we don't have any material concerns on that business. And as Christian said, we do see the growth moderating.

Our next question comes from the line of Sohrab Movahedi with BMO Capital Markets.

Okay. Rob, Harry, I mean, I heard you balanced, disciplined, profitable growth. I just wanted to look at our Hratch's business and Christian's business. I mean they are giving you similar ROEs have over the last, let's say, 5 quarters you're allocating more or less similar equity to each one of these businesses and earnings are within 10% of each other. So is this what balanced growth looks like? Is the capital markets can be as big as Canadian Personal Business Banking?

Sohrab, it's Rob. I mean I would think of it a little bit more as over time, that balance will appear. As we think about the market environment we've been in, capital markets is doing quite well. and the environment is constructive. We're taking advantage of businesses that we've been building for many, many years that are ultimately being done well within risk appetite and well within all of our just business mix appetite. So when we think about -- I don't see a world -- or certainly, it's not our goal to have the world you just described happen. We think more each of our businesses can grow and over time at roughly the same rate. I mean, even the capital markets business, when we talk about the long-term targets for it, it's a 7% to 10% earnings growth kind of business, the same thing we target for the bank, the same thing we target for the retail bank.

So I think there's a bit of a cyclical benefit or cyclical tailwind for us right now in the capital markets. But over time, we would expect that to normalize and see our businesses growing more in balance with each other. So when we talk balance, it's more in terms of growth rate rather than size.

Okay. And so if Christian could continue to give you good ROE, is there a finite on the capital that you're willing to allocate to him? Or is he open for business for as much capital as he needs?

Sohrab, It's Harry. I would say that the answer to the last question is no. We are -- we take a very balanced approach to where we allocate our capital. And when it comes to capital allocation, really, our approach is anchored in our client-focused strategy. This is all about our clients. So we're directing resources where we've seen strong client demand and, of course, long-term value creation.

And that's what we're seeing right now. Obviously, this is a very interesting business capital markets as we speak in this cycle. And we believe that we are very well positioned to service our clients as we move through this cycle. We are delivering capital markets products, I might remind you Sohrab to the entire organization. So our commercial bank, our wealth clients , our retail clients all have the benefit of capital market solutions. So this is a very well diversified business within capital markets as part of the diversified bank that we run.

Yes. I wasn't debating you on it, Harry. I mean it looks like it's doing well. It's been a source of stability. I mean there's great track record over there. So I'm just curious as to why it couldn't be a bigger part of the bank but on a consistent basis. But that was my question.

Our last question comes from the line of Gabriel Dechaine with National Bank Financial.

I just want to revisit that margin discussion in a slightly different angle here. For a while now, you've been guiding to something, I forget the language exactly stable to positive bias or upward bias, whatever it is. And you've been exceeding your guidance. And I'm just wondering, what's -- what drivers are doing better than you expected? Is it the mix that's shifted a lot more favorably? Is it the shape of the yield curve that's been a positive surprise. Just to give a sense of why you keep outperforming our expectation on that -- in that area?

Gabe, It's Rob. So it does come down, I think, largely to mix and product margin as well. When we think part of mix is client preference, right? Like if mortgages were growing more rapidly in the industry, our mortgages will be growing more rapidly, that's positive for net interest income. It's not necessarily positive for NIM, right? And so when we think about client preference for -- at one point, it was client preference for GIC was a bit of a margin headwind. Some of that is rolling off, and now it's becoming more of a margin tailwind like that mix is something that can fluctuate over time. What doesn't fluctuate is where our focus is and what our strategy is and offering solutions to clients as opposed to a product level strategy, but clients often choose different things in that strategy. So with the mix evolving in a positive way, the margin has been doing better.

And the other part that we can never really forecast is the competitive set and product level margins have been relatively stable, where we often in our guidance, assume there's going to be a little bit of price competition or a little bit of margin compression sometimes from some of the margins that we see in the market. So the hedging strategy has been doing what we exactly we thought it would do. The mix and the product margins are behaving well and in line with what our strategy is. But we don't always guide to exactly what clients are going to do because we never are positive on that going into a quarter. Overall, though, controlling what we can control, as I've said before, is what gives us the constructive view on margins. So we do think it's going to continue to migrate higher over time based on the things that we're doing.

And how important is the combination of slow mortgage growth plus the competitive dynamic based on that one graph in your slide, looks like the new inflows or renewals are still contributing to wider spreads.

Yes. Thanks, Gabriel. I'll jump in. It's Hratch here. So it's been a factor, but the mix is a much bigger factor than the inflow outflow differential, if you will. So if you look at over the last year, that differential between inflows and outflows had been, call it, a couple of basis points a quarter to the PBB margin positive. It is getting a little bit more muted. I would expect going forward, it's still a positive. We're still seeing, as you see on the chart, a bit of a differential there, maybe not as big as it was. And so for the next several quarters, I would still expect in the order of a basis point a quarter help from that. But the bigger factor is, as Rob said, the mortgages growth versus cards growth. And we've seen muted market on the mortgage side, right?

We were expecting sort of mid- to low single digits this year, and that would have been part of our guidance and the market has been a bit slower than that. Now it's more low single-digit growth on mortgages. And we continue to do really well in our cards franchise, both because of our co-brand portfolio as well as our premium travel portfolio and some of our new everyday rewards cards. And so I think if that mix continues, that will be a bigger factor than the mortgage repricing.

The revolvers or proportion of revolving balances is increasing as well. Is that kind of a...

It is. We've seen utilizations are not up that significantly, but we are seeing interest earning balances and the reward balance is growing at a healthy pace, obviously, in a responsible way from a risk perspective. We have been very prudent on the card portfolio. We've actually taken some actions going back 1 year, 1.5 years ago to tighten up a bit, and I think you're seeing that in the results of our charge-offs and cards versus some of the peers.

There are no further questions at this time. I would now like to turn the meeting over to Harry.

Thank you, operator, and thank you all for joining us this morning. I wanted to reiterate 3 key messages, which I hope resonated with you all today. One, we're delivering robust profitable growth. We continue to demonstrate that our ability to outperform is sustainable through different market environments. Two, we're focused on accelerating our execution. The cumulative effect of delivering strategic progress each quarter is significantly improving our capabilities across the bank. And three, we are well positioned to continue delivering high-quality financial results. We have a strong balance sheet and deep client relationships to continue growing organically. We are excited for the many opportunities ahead across each of our businesses.

And before I close, I wanted to thank the entire CIBC team for putting our clients first each and every day. Thank you, everyone, and have a good morning.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

Let's start our next session here with Harry Culham. Before we begin, I've been asked to tell you that Harry's comments today may include forward-looking statements. Actual results could differ materially from forecasts, projections or conclusions in these statements. Listeners can find additional details in the public filings of CIBC. Harry, welcome to the stage.

Thank you, Darko. It's great to be here.

I'm going to dive right into a few questions directly. And I think one of the things here as the relatively -- the newest CEO, I sort of want to dive in a couple of things. And CIBC had a record year. You've just stepped into the CEO role. And it did feel like, I would say, in your last conference call that there were hints at a higher ROE objective and I think you maybe even hinted there was going to be an Investor Day coming in 2026.

Now most -- many of the other companies that I've been following, including life insurance companies, they've had CEO changes and often, not always, but really often lately, it seems they're followed by strategic reviews, sort of medium-term objective updates. How should we think about the leadership transition at CIBC in that context?

Well, that's a great way to start it off, Darko. Thank you. And first thing I'd say is, I've had the privilege of sitting on our executive team for well over a decade, and I've had the opportunity to run areas like strategy and corporate development. So, in this transition, maybe it's a little different than others in the sense that we're working together very closely as a leadership team for many, many years.

And so we have that consistency around our strategy, the way we execute, that clarity of purpose around our clients has been very consistent for a long period of time, and we're really focused now on the acceleration of that execution. But we had time, lots of -- lots of very good time to engage with all of our stakeholders to listen, to understand what our clients are expecting from a transition, what our teammates, what our regulators, what our shareholders and we listened and we've been acting on that. And we feel very good about the transition. We have a culture that's very focused on our clients. We're very, very connected, and we're very much focused on driving those results for our stakeholders with predictability.

So -- you had a record year. The question always come like, as the new CEO, how do you steer the bank into another year? I'm getting the sense that from your first answer, that doesn't sound like there's going to be a lot of change. But maybe you can just touch on things that might change under your leadership. Again, just having reported such a strong year with very strong metrics. Maybe you can just touch on what might change.

Sure. Happy to. I mean the first thing I'd say is, I did talk about our strategy, that clear strategy we outlined years ago, in fact, with 4 pillars that we're very focused on delivering. But I would say that we've really been focused now on doubling down on that acceleration with excellence of the execution of that strategy. And what I mean by that is really drilling down into the enablers of the execution.

So doubling down on that connectivity North, South, East, West, back to front, delivering all of CIBC for our clients, really doubling down on that client focus will be the first enabler of our execution. The second enabler, as we call it, is really focused on that modernization journey, that drive for efficiency as we look to the new technologies of the financial services industry and the opportunities there to take costs out to further invest. And I think the third and maybe the most important enabler of our strategies, our human capital and the development of our human capital for the next generation.

And I think we have a leadership team at the top of our bank, and that permeates throughout the organization that is highly aligned around all 3 of those areas of enablement for the execution of our strategy. I think we're focused on taking that to the next level. And to get to your points around what's a little different, we are focused on the discipline around resources, and we're focused on taking the numbers to the next level, and we can go into those details, if you wish, over time.

I'd love to get into those details. So let's talk about it. So how do you press into like a premium growth and returns, maybe you can talk about some advantages you have. And let's dive into how you push for -- I mean, I get the enablers, but I really want to understand a bit of a deeper dive into how you push and bridge into premium growth and premium returns.

Right. Well, I think we do have some competitive advantages. We have some really great personalized offerings in our retail bank, our personal and business bank. If you think about Imperial Service, you think about our partnership with Costco. If you think about -- I talked about our modernization journey, you think about our opportunity to use new technologies in terms of AI and data and so on. And we're really focused in driving those areas to higher efficiency, to more productivity, et cetera.

So we are thinking about the business as we move forward. We have a 2030 strategic vision, Darko, which I'm not sure if I've ever mentioned to you or not. Hratch may have mentioned it to you, but we look at what our bank can aspirationally look like with all the things I've just talked about over the next 5 years. And we started that journey over the last couple of years, in fact. And we're very confident that we can deliver at the very higher end of the numbers that we've been talking about as we move forward over the next 5 years. And so we're taking a longer-term approach to many of these initiatives and these competitive advantages I just spoke to.

Okay. There's a lot to dive into there. I think the more immediate thing, I think I just -- because I caught on the word efficiency, it's -- what we've seen lately has been there's been some restructuring charges and banks are pressing into and leaning into some cost side. Your bank didn't take any restructuring charges. You're the new CEO. I would kind of thought that might be something that you might want to do. So how should we think about the approach under you now on efficiency and the possibility of restructuring?

I think the first thing I'd say is I'd just go back to -- we've sat together as a leadership team for a long time. And I've had the privilege over the last several years of running various different businesses. And so the strategy is consistent. How we execute now is longer term in nature, and we're very excited about where we see the bank over the next 5 to 10 years, our bank. And when it comes to charges or those type of things, we look at human capital development over the long run.

And this is a continuous assessment of talent. It's a continuous opportunity to develop talent to drive to higher productivity with new technologies. So will there be opportunities to find efficiencies from a talent perspective as new technologies come in? I absolutely think so. And we are driving to a lower NIX ratio over time. But we're not in a hurry to take large charges. As I said, this is a journey that we've been on, and we continuously evaluate our human capital.

Can you give us some examples?

Sure. I mean, at the end of the day, if you look at the ways of working, if you look at Agile as an example, that's a word that everybody is using these days, we are very much focused on doing things just a little differently. With extreme discipline around everything we do, delivering the entire organization to our clients means that we can do things more efficiently. So new technologies are going to help and the way we embrace these technologies will help. So rather than hiring, call it, 3% or 4% or 5% incremental FTE per year, perhaps we don't need to do that anymore.

And so when we look 5 years out and work backwards, we realized that we could find some efficiencies and we can do things a little differently. And so using the new technologies of -- that are on offer now and will continue to evolve rapidly, we think we're at a really interesting time to really service our clients. I mean if you think about these new technologies from an offense perspective, the personalization of data, the offerings we have, the productivity of our people, the defense of the organization, using AI for fraud, for AML, all of these offense [indiscernible] of the organization to defense, it all comes into play and will help us from an efficiency perspective.

And what might be the biggest help this year in 2026? What's the more near-term efficiency opportunity that you can give?

I think, to be honest, I think we've got all of this in motion. There are several larger opportunities that we're looking at, that we have implemented. We've been investing heavily over many, many years. In fact, we'd probably invest close to 20% of our expense base in our technology systems and data and AI. And so we're going to continue to do that, and that will provide opportunities to -- as we grow our revenue base to take our NIX ratio a little lower over time and drive our ROE higher.

So you mentioned a couple of other things, too, in your response to the advantages. And one of the things you touched on was Imperial Service. And it's always been something that I've sort of zeroed in, and I wanted to sort of touch a little bit upon that. It is something that's focused on the mass affluent and gaining wallet. I wanted to touch on just a couple of things with Imperial Service because it sounds to me that the focus is shifting.

When I hear you guys talk about it now, it's maybe changed. I mean last year at this conference, Victor told me you were hiring advisers. Now I'm sensing a small shift in the discussion. So first and foremost, maybe just to use a baseball analogy, like what inning are you in with Imperial Service? And what are the next steps with Imperial Service? Maybe just flush that out because it's the only bank that has this -- the strategy, and it's very unique and different.

Yes, absolutely. It is a premium offering for the mass affluent segment, which is one of the -- part of one of the key pillars of our strategy that focuses on mass affluent and private wealth. And we've been doubling down in this strategy for a number of years now, actually. And Imperial Service -- many of you hopefully will be Imperial Service clients. And if you're not, I'm happy to help, you can call me any time. But it is an excellent offering for the mass affluent, the affluent. We have about 10% of our core client -- retail client base in Imperial Service. It's personalized, it's financial planning, it's advice for families. And there are about 1 million clients and actually a little more than that now.

And the revenue per client is about 5x what it is in the core client space, in the core retail space with about 10x the sort of assets that a core client would have. And we also think that there are -- there is an opportunity to double the size of our Imperial Service offering through the use of data and AI with our existing clients and our core client base. And so we think there are tens, if not hundreds of billions of dollars of assets outside of our bank with some of our core clients in the Personal business bank. So we're very, very excited about this opportunity in one of our core areas of expertise, and we are really focused as a leadership team on ensuring that this is delivered.

So you have 1 million clients and you're looking to essentially double?

Right?

So it sounds like there's a lot of...

So we've got 2,250 financial advisers and other 1,200 or 1,300 associate financial advisers. And we also think not only will we enhance the coverage in areas where there's opportunity, but we're also focused on increasing the productivity of the advisers using new technologies, data, AI, et cetera, and taking the number of clients that an adviser can cover up by about 30% over the next year or 2.

Okay. So it doesn't require doubling the number of advisers?

Exactly.

Okay. Got you. Okay, interesting. You also mentioned Costco. We don't talk about it too much on conference calls, but similar question. Where are you in that journey? And how should we think about that opportunity for CIBC?

Yes, the Costco partnership is a fantastic partnership. They're very like-minded with their membership. We're very pleased with the way this is evolving. This is what we believe will be a long-term partnership. There are 3 million-plus credit card clients. We have franchised almost 10% of those clients and almost 10% of those franchise clients are actually Imperial Service clients.

So it's -- we're looking for the journey of these clients, and we're looking to deliver all of our bank to these clients. And we think there's enormous opportunity to continue to grow that up, that franchise. There are millions more members within the Costco membership that we are able to work with Costco to go after and provide banking services. So we're really optimistic that, that's another competitive advantage that CIBC has -- that our bank has.

So the opportunity there is grow the membership -- or sorry, grow the cardholders from the membership and increase your franchising. Do you have targets you want to share? Or is there anything that we can...

I don't have any targets I'd like to share at this point in time, but we are really focused. I mean we've taken in billions of dollars in assets, as an example, upwards of $15 billion plus in the last year -- 1 year, 1.5 years. So it's working, and we're really pleased with the partnership, and we think there's a long way to go here.

Okay. So maybe just before we leave the retail strategy, one of the things that I've also picked up on the last little bit from CIBC, which is a bit different from -- it's certainly different from pre-pandemic. And I think during the pandemic, maybe the view changed, but I just wanted to touch on it because when you hear CEOs talk today, they are less -- I mean they love the mortgage product, but it's not something that they're chasing.

And used to hear the term mortgage as an anchor product. And I'm fairly certain your bank has now sort of shied away from that and doesn't really view it as the anchor product anymore. So maybe can you just describe the shift of thinking and how we should think about your strategy going forward if it's no longer the mortgage product?

So the mortgage product is obviously important to our clients and tailoring the right product for our clients is really, really important. But we are very interested in delivering our entire platform to our clients. And we've shifted our focus to everyday banking, if you think about checking credit cards, investments, where the margins are higher. The world has changed from a mortgage perspective as well, as you'll know, Darko. The mortgage broker market is -- now accounts for, I think, more than half of the market. And those are not deep relationships.

We're focused on building deep relationships where we can deliver our entire bank to our clients. And that goes to the growth margin efficiency frontier that we're driving towards. And we think that we've hit the right business mix, coupled with the right treasury management to hit that margin that makes sense. The margin on newer broker-originated mortgages is significantly lower than the margin for accounts or clients of CIBC.

Okay. Maybe we can move on from retail. Commercial lending. At the industry level, things have slowed. But in Q4, you guys had big growth, I think 10% or something like that. What do you attribute to your above-market kind of above industry like growth in commercial? And how should we think about that into 2026?

So the first thing I'd say is, our commercial banking team is the same commercial banking team that's been around for years. We've added some great people as well to the team. And we build deep relationships. Don't forget, we are the Bank of Commerce. We've been around for over 150 years. We're known as the Bank of Commerce. Commercial banking is in our blood. And we're good at it. We're good at it from a risk perspective. We're good at it from building deep relationships where we deliver our entire franchise to our clients. Clients want the entire franchise. They don't just want a loan.

And so we're there to provide them with advice, insight, hedging, other opportunities and wealth management. And so that combination of that commercial and wealth franchise, we've seen incredible referrals, both north and more so now south of the border, upwards of 1/3 of our commercial clients have a wealth relationship with us. So that's worked very well in terms of driving that connected nature of our bank. And I think that's contributed to the growth in our lending platform in the commercial space. At the same time, we're really focused on both sides of the balance sheet.

So you'll notice in our numbers that they largely coincide. In fact, this year in '26, we expect that we'll probably grow deposits a little more quickly than we will the lending franchise. Subjected, of course, to what happens in the world around us, given the environment is a little uncertain at times. But those deep relationships, that ability to risk manage really, really well with that institutional knowledge we've had for 150 years has been very helpful to build that business with the right ROE in somewhat uncertain times.

It's interesting you mentioned that the deposit growth might exceed the loan growth in '26. What is driving that?

It's a combination of -- well, first thing I'd say is these are just deep relationships. So we are trying to drive the opportunity to deliver all of our bank and not just our lending products. So we are investing in our cash management platforms. We're investing in our -- I mentioned our data to understand exactly what our clients are doing, how we can be very helpful. So really bringing that whole suite of products to our clients. We've seen a shift, and it's been working very well in terms of driving that deposit franchise.

Okay. And now maybe we'll just touch on capital markets. I mean, your bank, pretty much every Canadian bank, frankly, benefited from a lot of tailwinds in 2025, was pretty strong cap markets. Can you walk me through these tailwinds and how we should think about CIBC's Cap Markets business into 2026?

Sure. I mean the first thing I'd say is our Capital Markets business is a client-driven business. The good news is we talked about a seamless transition. I kind of stepped away from capital markets well over, call it, over a year ago, and this same team is driving the capital markets franchise. We have -- we came out in 2022 with our Investor Day. We talked about what was possible, what we believe we could deliver on, and we've delivered on that and more in concert with the rest of our bank, growing at the higher end of our 7% to 10% earnings growth in the capital markets space, growing above 10% in the U.S., and we've delivered on that.

We've delivered on a higher pre-provision pretax earnings growth than anyone on Bay Street for really the last 10 years, and I see that continuing. And I'll give you the reasons why in a moment with a higher ROE. Our ROE that is in the 20s of late over the last several years. And what's happening there is an extreme discipline around resources. Every single resource we look at, every single resource that goes out the door, we measure, and we understand it by client. We understand it by product. We understand it by region.

And that great discipline that we have in the capital markets business is also -- we're now seeing across our bank. And so that lower volatility of earnings, higher ROE, higher growth is, I think, here to stay in our Capital Markets business. We're very confident in the client franchise that we're building, north the border. Obviously, we compete in just about everything with all of the other major players. We are a bulge bracket player north of the border. South of the border, we are not trying to be all things to all people.

We're really focused on building deep relationships, delivering the entire suite of capital markets products to our clients. And so we have hundreds of clients where we deliver multiple, multiple products and with a much higher ROE and great discipline. I think that will continue with this leadership team. We see outsized growth in the U.S. just a much larger opportunity in the U.S. Our clients in Canada are all active in the U.S. The areas that we're focused on, the industries we're focused on are very active. And I would say, Darko, we've had an incredible start to 2026, just like we finished 2025.

And the opportunity in the U.S. is all -- I mean, it's big for everyone presumably. It's all organic. Is there anything that you think you may want to consider bolting on to your franchise? Or is this really just an organic kind of?

This is an organic build. I would say, in general, our bank is focused on the organic build across the platforms that we have. With respect to capital markets, it's worked well for us. We've been extremely disciplined on who we hire and where we hire such that the culture is maintained, that culture of connectivity, that culture of care, that culture of accountability. It's funny. Sometimes we put senior managing directors at very large institutions through 17 interviews. It's very important that the culture is the right culture for CIBC, for our bank.

Okay. Then maybe we can switch from the business units to talk a little bit more about credit quality, I think. And I think it was quite stable in 2025 for CIBC. Your guidance for '26 seems good, maybe a bit better on the impaired side. But we sort of continue to hear concerns about the consumer credit and even though actually in Q4, yours was very stable. But we continue to hear some predictions that the consumer can continue to sort of deteriorate a little bit at the margin. So maybe can you start us off on credit quality with how you would describe the health of your consumer loan portfolio and what we should expect into 2026? Is that -- I'll just leave it open ended there, and we'll...

Okay. And I think you heard Frank Guse on the call, very confident in the credit quality across our platform. In fact, he's calling for mid- to lower 30s in gross impaired. So there will be an improvement on this year, a slight improvement on 2025 that is this year, for 2026. When it comes to the consumer, yes, there is some pressure from a delinquency perspective in the mortgage space, the credit card space. But it's all very manageable.

And if you look at the mortgage business as an example, on renewals, our payments are going to go up. They're going to go up a little bit in the very low single-digit percent of one's income, assuming income hasn't increased over the last number of years, which it likely has and the qualifying numbers all still apply. So -- and the losses on the mortgage portfolio, I mean, it was in the neighborhood of $10 million in 2025. So it's irrelevant, immaterial. It's relevant to our clients, and we're there to be proactive and help them navigate a difficult environment.

But the loan-to-value, the margin gives you great comfort that you're not going to take out your losses. The credit card portfolio is a premium credit card portfolio. I just talked about Costco and that mass affluent and affluent segment, and that's kind of 1/3. I think it's about 1/3 of our overall outstandings. And that's a good example of the kind of business we're running. And so we feel very good that, that strategy intersects with those deep relationships with the client segments that we're focused on to drive really good credit risk management.

And so as we think about -- I mean, often the discussion on PCLs, and I think about this year is -- looking at the guidance, it's very stable or modestly down from '26. How should we think about it longer term? Because like '27, '28, should we -- is this more or less the right level? Or do you think it could go lower?

I think we can see some improvement. I mean, listen, what we can control is the controllables. We don't know what's going to happen in the outside world, in the environment. But we do have great confidence in our ability to execute on that strategy. And that strategy takes into account excellent credit risk management.

And over history, it would have been in the 25% to 30% range. So that is a possibility. And at this point in time, our risk management team led by Frank Guse are very confident in our credit risk underwriting, and we feel very good about our books. And we're looking for a move lower in the gross impaired loan space, but modestly and somewhat dependent on unemployment and other factors in the economy.

And when I think of that 25% to 30% range longer term, essentially, I think what you're also saying then is that the loan mix is more or less the same going forward. Is that something? Or is there really a category where I think you're going to -- you might emphasize over the course of the next...

I think the focus on the mass affluent and that understanding your clients in a more meaningful way using data and AI will be helpful from a credit risk management perspective. I think from a commercial lending perspective and a capital markets lending perspective or corporate lending perspective, we're in a really good space. In fact, in the U.S., as an example, we would expect that loan losses will move lower over time.

There was an elevated loan loss provisioning over the last number of years across the industry. So we're optimistic in that space as well. That's an area where -- the U.S. is an area where we have invested heavily in the foundation and the infrastructure. So there is upside as loan losses come lower as well to help the ROE.

And since you touched on the U.S., I mean, let's -- how do we -- how should we think about the U.S. business? Because when I look at your U.S. business relative to some others, it's smaller. It's a little more, I would call, focused. Is this something that over your tenure now as a new CEO, maybe you can give us an idea of your vision for the U.S. business and where you see that going over the next 4 to 5 years?

Absolutely. Yes, I'm really pleased with what our team is doing. This is a relationship-oriented business. We bought the Private Bank in 2017. We bought Atlantic Trust Wealth business before that and have done some bolt-ons since then with great team and good culture, of course. We have invested very heavily in the commercial and wealth platform that was the former Private Bank and Atlantic Trust over the last several years to build that foundation that we can now start to drive incremental revenue from.

We think that there is a really good opportunity to continue that connected nature between commercial wealth -- connected business between commercial wealth and capital markets in the U.S. And so we are seeing very, very good referrals and very good opportunities to do business together across the platform for our clients and deliver all of CIBC also in the U.S. The referral volume is much lower in the U.S. than it is in Canada thus far, but we think there's an opportunity to move towards the levels that I mentioned earlier in Canada, so from a wealth -- referral perspective.

So we're optimistic in the U.S. I think the marginal business being done now is in line with what we're seeing from an ROE perspective in Canada. Don't forget, we have goodwill and intangibles from the purchase in 2017. But the business that we're putting on the books now, highly connected across the platform is very promising from an ROE perspective.

So it sounds like it's organic not...

Correct.

Not inorganic. And it doesn't sound like there's a lot of retail in your future either?

There isn't a lot of retail. We have 9 branches -- we'll have 9 branches at the end of this quarter in the Chicago area. We're really focused on -- we built a new system, new technology that rivals some of our best-in-class mobile offerings here in Canada for our mass affluent client base, our wealth client base, and we're really pleased with that.

These things take time, of course, and they take investment. And we've been really focused on getting that foundation in place that we can now build from organically. Will we have tuck-ins? Very likely over time. We'll have some small tuck-ins that will be accretive to ROE over time, but we're not looking to make a big or inorganic splash.

Sorry, as I struggle with the technology here, it looks like my WiFi just crashed, so I'm sitting here trying to find your questions. And I'm getting the circle of death. Apologies to the crowd here. While we wait for that let me see what else I've got in my bag of questions for you. I think one thing that -- obviously, we haven't touched on capital yet. So we've seen rising capital requirements. Your ratio is -- we talked about ranges and such.

And maybe you can talk on where you want to manage the bank, why you want to manage it there. And most importantly, the biggest question that I get from investors is, how much capital can you generate? And I'm thinking about '26 and '27 specifically. So maybe you can just touch on those things from the capital.

Sure. I mean I think from a capital perspective, I mean, obviously, it's an uncertain environment. And we think that there are a couple of gating factors for us to target where we want to be. And number one, we think we should be 100 points above the minimum, and that puts us at 12.5%. And then our competitors, we're all in the sort of 13s at the moment. And so we think we're in a really good position right now to drive organic growth as it returns as the opportunities to help our clients grow and prosper in '26 and beyond.

And so we have ample capital. We're generating ample capital. We're generating -- I think Rob is here, kind of 10 basis points a quarter, something like that. We also have some other opportunities. And we think that the ROE at this level is -- we've targeted 15% plus. We think we can deliver 15% plus at this level of capital. And you're going to see capital at these levels likely for a little while. But as uncertainty in the economy, in the environment recede, which we think is the base case, we will be well positioned to deploy capital with our clients and help them grow.

Okay. Apologies to the crowd that I didn't get to your questions, but we've now at the time where I'd like to throw back the last word to the CEO. So Harry, your closing remarks and/or key messages for the investors today, please.

Well, firstly, thank you for having me. I'm delighted to be here. We have -- first thing, I'd say is we have an aligned leadership team that's been in place for a number of years. And leadership team, I'm talking about not just the top 10 or 20 people, but the top 100 to 400 people across our bank that are helping deliver on that client focus, doubling down on that connectivity, really focused on that modernization, that have drive to efficiency and outperformance at the end of the day, and that's what we're driving for.

We have a clear strategy. We're focused on investing for the future with new technologies. We're focused on investing in human capital. And the execution of our strategy, accelerating the execution of our strategy is first and foremost for us, really focused on driving that 7% to 10% earnings per share growth plus in environments like we have today, as Rob pointed out on our call in the fourth quarter, driving an ROE north of 15% plus.

And all this should hopefully lead to outperformance of our total shareholder return. My goal is to deliver consistency, sustainability in terms of growth of our platform with predictability. And I would like to thank you all for your interest in our bank, and thank you for having me today.

All right. Thank you very much, Harry.

Thank you.

Good morning. Welcome to the CIBC Q4 Quarterly Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations. Please go ahead, Geoff.

Thank you, and good morning. We will begin this morning's presentation with opening remarks from Harry Culham, marking his first earnings call as our President and Chief Executive Officer; followed by Rob Sedran, our Chief Financial Officer; and Frank Guse, our Risk Officer.

Also on the call today are our group heads, including Hratch Panossian, Personal and Business Banking Canada; and Susan Rimmer, Commercial Banking and Wealth Management. I'd like to take a moment to introduce two new members of our executive leadership team, Christian Exshaw from Capital Markets; and Kevin Lee from our U.S. region. Christian and Kevin have served with our bank for over 17 years and 23 years, respectively, and bring exceptional leadership, a proven track record of performance and exemplify our purpose-led and collaborative culture. Please join me in welcoming them to our new group heads.

We have a hard stop at 8:30 and would like to give everyone a chance to participate this morning. So as usual, we ask that you please limit your questions to one and requeue. We'll make ourselves available after the call for any follow-ups. As noted on Slide 1 of our investor presentation, our comments may contain forward-looking statements, which involve assumptions and have inherent risks and uncertainties. Actual results may differ materially. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. Management measures performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance. With that, I will now turn the call over to Harry.

Thank you, Geoff, and good morning, everyone. I'm excited to be speaking with you today as President and CEO of our bank. I'm energized by the opportunities ahead of us, building on our strong performance we've delivered in fiscal 2025. Our performance reflects our momentum and the execution of our client-focused strategy right across our team. When we announced our CEO succession in March of this year, I stepped into the role of Chief Operating Officer and spent the last 8 months listening and engaging with our stakeholders. And these discussions have reinforced my confidence that our client relationships are strong, our team is proud and our bank is being recognized for delivering consistent, strong financial performance.

Building on this foundation, we have united our leadership team and employees globally around an evolved ambition to be a client-focused, highly connected and performance-driven bank, delivering industry-leading shareholder returns. And this ambition is underpinned by the same strategic pillars that have driven our success and strength through the cycle performance over the past several years. So let me be clear. Our strategy remains consistent. It is working, and we are committed to delivering on what we set out to achieve. Our focus now is to accelerate the execution of our strategy to deliver relative outperformance.

And to sustain our momentum, we have aligned our team around 3 key enablers: One, we'll sharpen our client focus and double down on our connectivity. Two, we'll drive efficiencies and modernization; and three, we'll elevate our focus on human capital by fostering a culture of engagement, development and accountability. And with that, let me provide an overview of our adjusted results for fiscal 2025. We reported net earnings of $8.5 billion and earnings per share of $8.61, up 17% and 16%, respectively, from the prior year. Record revenues of $29 billion were up 14%, driven by double-digit revenue growth across each of our businesses. We delivered positive operating leverage and managed our enterprise efficiency ratio lower, both for a third consecutive year.

Our top-tier credit quality remained resilient with an impaired PCL ratio of 33 basis points, delivering at the favorable end of our guidance range. Our robust CET1 ratio of 13.3%, coupled with the earnings power of our bank gave us confidence to announce a 10% increase to our quarterly dividend to common shareholders. We also delivered a return on equity of 14.4%, which was up 70 basis points from the prior year. Our strategy and unique competitive advantages position us well to further our momentum and deliver for our clients. Our first strategic priority is to grow our mass affluent and private wealth franchise. We've cultivated a unique ecosystem to win in this segment, including our distinctive Imperial service platform, strategic Costco partnership, industry-leading Wood Gundy brand and our high-quality RIA in the U.S.

In Imperial Service, our advisors are passionate about our clients and they're engaged. Our NPS scores continue to hit all-time highs each quarter. Over the past year, our client-focused distribution channels have supported our market share gains in mutual funds, assets under management in Canada. In 2025, CIBC ranked in the top 2 of the big 6 banks for total mutual fund net sales. And we're going to continue to lean into these strengths to generate capital-light fee-based revenue, gather high-value personal deposits and drive wealth referrals. These are intentional outcomes directly aligned to our strategy and all accretive to our ROE profile.

Our second strategic priority is to grow digital-first personal banking. Our leadership in digital banking is recognized industry-wide. This past quarter, we received the 2025 Mobile Banking Award by Service Corp. Leveraging our award-winning digital capabilities in Canada, we also launched a new digital banking platform for the U.S. market as well. So collectively, these efforts are enabling us to further attract and build new and deeper relationships through data-driven insights, adding value for clients and driving growth. Our third strategic priority is to leverage our connected platform, one of our greatest competitive advantages.

Our culture of connectivity enables us to deepen and broaden our client relationships, expand our U.S. franchise and strengthen cross-business referrals. By connecting our commercial banking, wealth management and capital markets teams, we have built a strong internal referral system across our businesses that results in greater agility and more innovative solutions for our clients. And as a result, cross-business referrals in our U.S. Commercial and Wealth franchise were up 23% from the prior year. A connected capital markets footprint requires a strong presence across North America.

In fiscal 2025, revenue and net income in our Capital Markets U.S. franchise were up 39% and 50% from the prior year, respectively. We expect the rate of growth in U.S. capital markets will continue to outpace Canada and other regions over the medium term. And finally, our fourth strategic priority is to enable, simplify and protect our bank. Our performance-driven approach requires continually realizing expense and balance sheet efficiencies, modernizing our technology and scaling our data and AI infrastructure. Building on our history of innovation, we launched CIBC real-time experience, which we call Cortex for short. This is a proprietary AI-enabled client engagement engine that seamlessly integrates with our existing platform and shapes data-driven personalization.

In fiscal 2025, we made significant strides in further embedding AI as a core capability across our bank. We are well positioned to accelerate our AI adoption with a focus on Agentic AI and continued investment in talent and partnerships to continue to transform the banking experience. Looking to the operating environment in the year ahead, ongoing trade negotiations present uncertainty in Canada and abroad. Our outlook assumes that trade deal is extended, an outcome we strongly believe is in the best interest of the North American economy. We expect targeted fiscal policy relief for sectors affected by trade as well as stimulative monetary policy to support moderate economic growth across our geographies in 2026.

We are also supportive of nation-building initiatives in key sectors of Canada's economy to help create a more prosperous future. We have deep client relationships in these sectors and we'll be there to support Canada's growth. Regardless of how the environment evolves, we will continue to stay close and proactively engage with our clients. So in closing, we're setting our sights higher -- to build on the clear momentum we've established, we have built an engine to deliver sustainable, relative outperformance and a road map to generate profitable growth over the long term. We believe our unwavering client focus, the bench strength of our team and accelerated execution of our strategy will drive value for our stakeholders through the cycle. It's an exciting time at CIBC, and I'm honored to have the opportunity to lead our team.

With that, I'll now turn it over to Rob for a detailed review of our financial results. Over to you, Rob.

Thank you, Harry, and good morning, everyone. Let's start with three takeaways. First, our consistently strong results and increasing ROE reflect the disciplined execution of our client-focused and connected strategy. In other words, the results were on strategy. Second, our record results this quarter are revenue driven, providing good momentum as we head into 2026. And third, our balance sheet -- our strong balance sheet has allowed us to grow with our clients and return capital to our shareholders. In fiscal '25, we returned over $5 billion or approximately 2/3 of our net earnings through dividends and share repurchases. These achievements reinforce our confidence in our ability to deliver long-term value and underpin the dividend increase Harry referenced in his remarks.

Please turn to Slide 8. For the fourth quarter of 2025, earnings per share were $2.20 or $2.21 on an adjusted basis. Adjusted ROE of 14.1% was up 70 basis points from the same quarter last year. For both the quarter and the full year, the only adjusting item was the amortization of intangibles.

Let's move on to a detailed review of our performance. I'm on Slide 9. Adjusted net income of $2.2 billion increased 16%. Expanding margins, volume growth and higher fee revenues allowed us to maintain revenue momentum, deliver the 9th consecutive quarter of positive operating leverage and continue to drive pre-provision earnings growth in a strong range at 20%. Total provisions for credit losses were up 44% year-over-year largely due to higher performing provisions as impaired losses were at the low end of our 2025 guidance range. Frank will discuss credit trends and the outlook in his remarks.

Slide 10 highlights key drivers of net interest income. Excluding trading, NII was up 14% with continued balance sheet growth and expanding margins. All bank margin ex trading was up 14 basis points from the prior year and up 6 basis points sequentially. Canadian P&C NIM of 290 basis points was up 9 basis points sequentially driven by loan margin expansion as well as the impact of favorable mix. In the U.S. segment, NIM of 384 basis points was up 6 points from the prior quarter due to continued strength in deposits as well as loan fees that were higher than normal. In both Canada and the United States, we expect margins to move gradually higher from these levels, albeit at a slower rate than what we saw in fiscal '25 based on the current forward curve.

Turning to Slide 11. Noninterest income of $3.4 billion was up 15%. Market-related fees increased 18%, helped by constructive markets with particularly strong growth in trading, underwriting and advisory and mutual fund fees. Transaction-related fees were up 8%, driven mainly by higher credit fees, partly offset by lower card fees.

Slide 12 highlights our expense performance. Expenses increased 10% as investments and seasonal costs, including higher severance, were only partly offset by the benefits of prior initiatives to improve efficiency. We continue to invest in technology and AI to both surface efficiencies and develop an enhanced client experience through faster and more personalized service. We intend to manage expense growth to the mid-single digits for 2026 and continue to manage to positive operating leverage on an annual basis.

Slide 13 highlights the consistent strength of our balance sheet. Our CET1 ratio at the end of the quarter was 13.3%, down 7 basis points sequentially and stable year-over-year. We delivered solid organic capital generation, offset by deployment in risk-weighted assets and our ongoing share repurchase program. Please note that in addition to ongoing organic capital generation, in Q2 of '26, an adjustment to our operational RWAs will add roughly 25 basis points to our CET1 ratio. Our liquidity position remains very strong with an average LCR of 132%.

Starting on Slide 14 with Canadian Personal and Business Banking, we highlight our strategic business unit results. Adjusted net income was stable to the prior year as strong revenue growth was largely offset by higher provisions for credit losses and higher expenses. Supported by core business momentum, pre-provision pretax earnings were up 14%. Revenues were up 12%, helped by margin expansion and favorable business mix. Net interest margin was up 33 basis points year-over-year and 11 basis points sequentially. Beyond the benefit from our tractoring strategy, we continue to see tangible results from our focus on deep and profitable client relationships, product mix and disciplined pricing decisions. Expenses were up 10% due to investments in technology and other strategic initiatives as well as higher employee-related compensation, a software write-down and a legal provision.

On Slide 15, we show Canadian Commercial Banking and Wealth Management, where net income and pre-provision pretax earnings were up 9% and 13% from a year ago. Revenues were up 15% from last year. Wealth Management growth of 18% was driven by higher average fee-based assets resulting from market appreciation and increased client activity driving higher commissions. Commercial Banking revenues were up 9%, driven by volume growth and margin expansion. Commercial loan and deposit volumes were up 10% and 9%, respectively, from a year ago. Expenses increased 16% from a year ago, mainly from higher compensation linked to the strong revenues, higher spending on technology and other strategic initiatives.

Turning to U.S. Commercial Banking and Wealth Management on Slide 16. Net income was up 35% from the prior year, mainly due to lower loan loss provisions. Revenues were up 9% from last year. Net interest income was helped by deposit growth of 8% and wider deposit margins. Fee income growth was broad-based, reflective of our strategy to deepen client relationships. Expenses were up 18%, partially due to higher performance-based compensation as well as strategic initiatives.

Turning to Slide 17 and our Capital Markets segment. Net income was up 58% year-over-year. Revenues were up 32% across our Capital Markets businesses. Global Markets saw growth across most products. Corporate Banking was up from higher average balances and fees and investment banking saw higher debt underwriting and advisory revenues. Our focus on the U.S. continues to deliver strong results with year-over-year revenue growth of 48% and 38% of segment revenues coming from that market this quarter. Expenses were up 9%, largely due to continued investments in business and technology initiatives, higher compensation and higher volume-driven expenses.

Slide 18 reflects the results of Corporate and Other, a net loss of $42 million compares with a net loss of $7 million in the prior year. We maintain our medium-term guidance of a quarterly loss between $0 and $50 million for this segment.

Slide 19 highlights our full year performance. 2025 was a record year for CIBC. We delivered double-digit growth across all of our metrics, growing revenues by 14%, pre-provision earnings by 18% and EPS by 16%, all well ahead of our medium-term targets. ROE for the year was 14.4%, an increase of 70 basis points from the prior year. We are confident that our strategy, connected culture and financial strength position us well to build on this momentum, drive EPS growth and deliver a premium ROE. On that ROE, we remain committed to an improving ROE above 15%, and based on our current outlook, expect to achieve that target in fiscal '26, helped by EPS growth that is at the high end or higher than our 7% to 10% medium-term target range.

In closing, we believe this year's performance reflects the impact of the focused investments we have made in technology, talent and client experience, investments that combined with disciplined execution are now translating into strong financial results. With that, I'll turn it over to Frank.

Thank you, Rob, and good morning, everyone. Despite economic uncertainties, our credit performance remained resilient throughout 2025, ending the fiscal year at the low end of our full year guidance. We continue to focus on developing deep client relationships across all our segments and invest in risk strategies to drive strong credit outcomes. Trade headwinds in recent quarters have led to higher provisions in our performing allowance. Our build this quarter, leveraging expert judgment positions us well to navigate uncertainties that may persist into the coming year. We remain confident in the quality and consistency of our credit performance as demonstrated over the past year.

Turning to Slide 22. Our total provision for credit losses was $605 million in Q4, up from $559 million last quarter. We continue to strengthen our allowance coverage this quarter by 2 basis points to 80 basis points with our year-over-year total allowance up by $625 million or 15%. Our performing provision was $108 million this quarter, mainly a reflection of the evolving economic environment and the impact of some credit migration. Our provision on impaired loans was $497 million, up $16 million quarter-over-quarter. Higher provisions in our Capital Markets and Canadian Commercial Banking segments were partially offset by lower provisions in our other portfolios.

Turning to Slide 23. In Q4, '25, impaired provisions increased slightly with the fiscal '25 loss rate at 33 basis points. Canadian Personal and Business Banking and U.S. Commercial impaired provisions were down this quarter. Impaired provisions in our Capital Markets business was up in Q4, mainly driven by two names. These names represent loan exposures in different geographies. And overall, this portfolio continues to perform well. In our Canadian Commercial Banking portfolio increases this quarter were not attributable to any notable sector. We remain pleased with the strong performance across our portfolio, especially in our commercial portfolio this year.

Slide 24 summarizes our gross impaired loans and formations. Gross impaired loan ratio was 61 basis points, up 5 basis points quarter-over-quarter. The increase in business and government loans was largely driven by one new impairment in our Capital Markets portfolio. While mortgages experienced a moderate increase this quarter, our current loan-to-value ratio for the mortgage book remains prudent at 55% for the overall book and 65% on impaired balances. Notwithstanding the softness in the housing market, we continue to not expect any material increase in losses in our mortgage portfolio.

Slide 25 summarizes the 90-plus day delinquency rates and net write-offs of our Canadian consumer portfolios. Our Canadian consumer portfolios performed as expected throughout fiscal '25, reflecting the evolving economic conditions. The 90-plus day delinquencies in our credit cards and residential mortgages portfolios increased quarter-over-quarter, driven by challenging macroeconomic conditions, while personal lending remained flat. Although our net write-off ratio was down slightly quarter-over-quarter, we remain focused on unemployment levels, which will remain a key driver of this metric. While we continue to see the impact of elevated unemployment and ongoing macroeconomic uncertainties, we are pleased with the overall resilience and strength of these portfolios.

In closing, while the economic environment was more challenging in 2025, we were pleased with our credit performance this past year. We will continue supporting our clients to navigate through the dynamic environment and taking proactive actions to effectively mitigate risk. Looking ahead to 2026, despite ongoing headwinds, we anticipate that the gradual improvement in the macro economy will lead to impaired provisions stabilizing in the mid- to low 30 basis point range, a slightly improved outlook over our mid-30 basis point guidance for fiscal 2025. The increase in performing allowances over 2025 reflects our proactive approach to maintaining prudent reserves, ensuring we are well positioned to manage uncertainties that may persist in the year ahead. I will now ask the operator to open the line for your questions.

[Operator Instructions] Our first question comes from Ebrahim Poonawala from Bank of America Merrill Lynch.

I guess Rob's prepared remarks set this up, but maybe both from Harry and Rob for both of you. When we think about -- you mentioned the 15% ROE, which I think is better than expected for this year. I guess, Harry, for you, I think the question is when you look at the franchise and hear you loud and clear, there's no big dramatic change in the strategy. But when we think about the Canadian banks, there are banks that are clearly earning much superior ROEs, 17%, 18%, and there are others who are trying to catch up to get closer to that. Given kind of your guidance for 2026 and what you see within the franchise. Just talk to us in terms of is there an opportunity for commerce to have a best-in-class ROE? Or are there structural disadvantages the bank faces to get to that point? And if so, what do you need to do differently to get there?

Thank you, Ebrahim, I'll take it first, and I'll pass it over to Rob. It's Harry here. So as I said in my opening remarks, we are on a journey here. Our strategy and our unique competitive advantages that really position us well to deliver profitable growth. And that will lead to a premium ROE. We're targeting the right client segments where we can deepen relationships and be meaningful to our clients. We have the right product focus. We're focused on deposits, investments, transaction accounts across each of our businesses. And we believe we have the right technology. We've invested in AI-enabled technology, such as Cortex, which I mentioned at the outset, in the retail and our cash management systems in corporate and commercial. And I believe we have the right culture to take us to the next level. Our team members are focused on delivering all of our connected bank to our clients, and that will lead to this trajectory that we're forecasting moving forward to move higher from an ROE perspective. Rob, do you want to jump in with some more specifics?

Yes. Thanks, Harry. I mean, Ebrahim, we can all -- you can all do the math, but maybe I'll try to tie it together for you in terms of some of the levers that we think we have at our disposal. But I would reiterate what Harry said, when we cross 15%, we're not going to be hanging mission accomplished banners at CIBC Square. Like we do think the strategy will continue to push the ROE higher over time. And just because we're not changing our target at this time, it doesn't mean that our ambition isn't for a higher ROE. And we don't see any disadvantages that can't allow us to continue to push that ROE higher. When you think of some of the things that are going to get us there, you start off just even normalizing credit losses. I mean the performing provisions that we took this quarter around $450 million, that alone is about 60 basis points. We don't plan for that to happen every year as that normalizes, and that's even before considering the potential for impaired losses to come down. That's an ROE tailwind that we expect. Operating leverage is just -- is an operating philosophy for us. You think about a couple of hundred points of operating leverage, which is not necessarily fiscal '26 guidance, but it is a target that we shoot for sort of through the cycle. A couple of hundred points of operating leverage is another, call it, 30 or 40 basis points of ROE expansion that we can -- we expect to see. When you think about our capital position, we optimize the balance sheet as best we can, call it, a basis point is basically a basis point. So if the capital CET1 comes down by 40 or 50 basis points, the ROE goes up by 40 or 50 basis points, excess capital doesn't expire. We're not in a rush to get rid of it. But we do have a buyback active and we do see opportunities to deploy profitably over time. So there's a number of levers that are adding up to our confidence that the ROE trajectory is going to continue beyond next year.

Our next question comes from the line of Matthew Lee from Canaccord Genuity.

NIM continues to be a big story for you. I know you've talked about persistent NIM increases and provide some color directionally, but can you maybe break down the NIM improvements based on product mix, deposit mix and tractors. Just trying to get a better understanding of which of those factors are having the biggest impact? And then what levels of sustainability there is beyond 2026?

Matthew, it's Rob. I'm going to get started and then hand it to Hratch because I think a lot of the story from a business mix perspective is unfolding in Personal and Business Banking. The tractoring strategy has been a persistent tailwind for us. We think that tailwind is going to continue through '26, albeit perhaps starting to moderate a little bit. But the tractoring is something that is largely based on the forward curve, and provided the rates hang around where they have been. We expect to see that benefit persist in both Personal and Business Banking and at the all bank level. When it comes to business mix, it's probably better to hand it off because it is very much on strategy, and I'll let Hratch talk a little bit about what he's seeing.

Yes. Thanks, Rob. Matthew, thanks for the question. I'll start by saying, look, we're very proud of what the team has been able to accomplish on the retail side, right? What you're seeing, as Rob said, is really the result of strong execution, pricing discipline and strategy. Yes, rates in the environment are helping, but that's actually been a smaller part of the story as we look through this year. So I think we've talked about this before. When you look at the rate help in the business, it's a few basis points a quarter. And when you look at the full year this year, full year ROE is about 30 basis points higher on a year-over-year basis, and a lot of that has been driven by the strategy. And we've been very clear about our strategy. We're focused on our clients. We're focused on being that everyday bank for our clients and have them highly engaged. That means focusing on the everyday products and winning share there. And I think we've done that well this year. You look at our demand deposits that actually grew double digits before we did some work to optimize margins. We actually ran off some high interest deposits deliberately that were negative margin. So without that, demand deposits that were profitable are up double digits for the year. We've increased our cards business 6%. That helps. We've been very deliberate on the mortgage business. We've been doing business with the clients that are franchised with us. We price sharply, but we price for the overall relationship. We will not price mortgages individually. And by doing that, we've been expanding margins in the mortgage business as well. And so if you look at this quarter's 11 basis points, it's a lot of the same drivers, right? It's those products that are growing that are higher margin, it's the margins in mortgages going up, it's the margins and deposits going up. And I think that's what has allowed us as a team to deliver from what I can see right now this quarter's street-leading revenue growth. And I think there is a lot more momentum to go as we continue to execute on our strategy. The interest rate, right, will slow down. I think the interest rate help through '27 will slow down, but we can continue to execute on our strategy and accreting to margin and accreting to ROE in this business.

Our next question comes from John Aiken from Jefferies.

Rob, we just drilled down NIM. I'd like to take a little -- closer look on expenses if we can. Obviously, you're looking for positive operating leverage next year. But as we look at the investments that you're making in terms of your platforms, technology, everything else like that, are there any of the segments that you would expect to have greater or lesser operating leverage as you look out to 2026?

John, it's Rob. So good question. And we tend not to focus too much on operating leverage at the individual segment level in any given year. There is some differences between them, some investments that we're making and some strategic initiatives that can pop up. You saw a little bit of that in Q4, right? So if you look at some of the Q4 expenses, we had pretty good visibility coming into the quarter on revenue growth, pretty good visibility on operating leverage, and decided to take the opportunity to advance some of the -- those strategic initiatives that we often talk about. As we think about the coming year, all -- we ask for positive operating leverage from all of the businesses. But a year like what Capital Markets had as an example, this year, it's going to make it a little bit harder for Capital Markets to deliver positive operating leverage next year. We don't let them completely off the hook, but it's just something that we don't necessarily assume is going to happen. The other businesses, we're targeting positive operating leverage. But again, we're going to manage it through the year and really aiming to deliver it at the all bank level rather than the individual segment level.

And just as a follow-on, when we look at technology spend in particular, are we looking at this in totality accelerating, leveling off or staying reasonably the same?

No, I think we need to assume that technology spend continues to grow, right? There's a lot of talk about AI, a lot of talk about the different operating models. But AI isn't pixie dust. It requires investment. We're making those investments. And we are going to continue to add resources there and reshape the workforce as well over time. We think we've been managing through it so far, and we're going to continue to accelerate those investments. We spent time putting governance structures around our technology spend, putting in a really deep dive on how we allocate those technology spends. We think we've been smart and purposeful on those investments. That's going to continue, but particularly with a robust revenue environment that we've had, we would expect to continue to invest in technology. It's the way forward for the industry. It's certainly the way forward for our bank.

Our next question comes from Doug Young from Desjardins Capital Markets.

Just a few things on capital, Rob. First, you said there's a 20 basis point benefit you're getting in Q2 of '26. What's driving that? And is there anything else coming down the pipe to think about? And then like the focus for excess capital, I assume it's buybacks and tuck-ins. And then like thinking about capital and you're looking at a 15% plus ROE. Like what CET1 are you triangulating to for fiscal '26?

Okay. Thanks, Doug. It's Rob. So it was 25 basis points. And you will recall in Q1 of '23, we had an operational risk charge that showed up in our results in Q2 of -- showed up in operational risk weights, excuse me, in Q2 of '23. The rules allow for the potential exclusion of that 3 years forward, and we did receive approval to remove that from our operational risk weights. So 3 years later, it will be Q2 of '26. So we'll be adding the 25 basis points of CET1 back at that time. When we think about the level of capital at which we're looking to operate, obviously, it's -- we're running with significant excess common equity. We would say that we aim for about 100 basis points above the regulatory minimum. That would be around 12.5%. A second gate though, on that is the competitive dynamic and where our competitors are. What is assumed in our capital plans for the coming year, is basically the ongoing buyback that we have, ongoing robust capital deployment, which we expect to see risk-weighted asset growth. So we're not seeing a huge drawdown in our capital ratio, but we do expect the capital ratio to move a little bit lower in line with the buyback. And from a deployment perspective, the story really hasn't changed. We think we've got four growth businesses that over time can absorb that excess common equity, profitable growth across all of our businesses. We are always looking around for tuck-in acquisitions that could advance and accelerate our strategy. I wouldn't say much more beyond that from an acquisition perspective at this point. It is largely of a tuck-in variety. And so it's more of the same from what you've heard from us in the past.

Our next question comes from Mario Mendonca from TD Securities.

I think Rob and Harry, when you were referring to the potential ROE improvement, one segment that was left out was the U.S. And what I'm observing there for the quarter and for a few years now is that expense growth has been very elevated. And I appreciate it's things like comp and tech spending and -- but it seems like there's a major project going on in the U.S., perhaps it's compliance-related spending. Can you talk about what's going on there and when you expect that spending to become a little more in line with the revenue growth, so that business can contribute as well?

Maybe I'll start -- it's Rob. Maybe I'll start, and I'll pass it off to Kevin to give a little bit of color. We have said and we've been saying for a while, I guess, on the U.S. side that we are building for the bank we want to be, not necessarily the bank we are. And regardless of the direction of travel on regulatory requirements in the short term, it does require us to invest in that infrastructure to support the growth profile that we expect to see coming in the coming quarters and years. So we've been going through an awful lot of that. I do think -- we do think the path from here is not quite at the same level of growth. There was some strategic spend in Q4 as well that makes it look a little bit on the high side, and maybe that's a good place to hand it off to Kevin to talk a little bit about what happened in Q4 and a little bit about how we seize the outlook.

Right. Thanks, Rob, and Mario, thanks for the question. Very happy to be here today. So the elevated expenses in the quarter were due to a number of factors. Number one, performance-based compensation was a large part of it. But -- and Rob referenced this a little bit, there was a charge of about USD 10 million relating to the optimization of our branch network. Also important to note that there is going to be a corresponding annual savings to that is almost at the same level. And in addition to that, there were really a number of just other smaller seasonal items. So important to take away that we expect expense growth to normalize and be in the mid-single digits next year exactly in line with the broader bank.

Okay. That's helpful. Let's drill down something else. The capital markets business, the loan growth there has been exceptional. By my math, 22% year-over-year this quarter. Last couple of quarters have been running very hot. Can you speak to what's growing there and address the notion that sometimes growth in this area just leads to grief 2, 3 years later. We've seen this at banks in the past. So talk about what's going on there and maybe address the concern that this is going to be an issue 2 or 3 years from now.

Thanks for the question, Mario. This is Christian. So I'll just take it back to the U.S. strategy. So as Rob mentioned, the U.S. has been growing quite considerably for us. The U.S. now is roughly 34%, 35% of the Capital Markets revenue. It's roughly double what it was actually 5 years ago, and we continue to, I would say, invest in this business. When you look at, I would say, the corporate credit book, it actually generates now more revenue in the U.S. than it does in Canada. And that just means that we've been onboarding many, many more, I would say, clients, so just in line with our strategy. And remind you that when it comes, I would say, to looking at this loan book, it really is about having an anchor product, so we can actually cross-sell, whether it's advisory services or hedging product. The other area, which has been growing considerably, as you noted, has been the business that we call global credit financing business. We created this business a number of years ago. And for risk purposes, we put all these businesses together. So it encompasses businesses such as repos, ABS, MBS, securitization, CLOs and loan warehousing. And we actually like this business very much, I would say, because it scores strongly on three metrics. Number one, as I said, is that it is client-driven and therefore, aligned with our strategy. And we -- in that business, you deal mainly with the highest quality sponsors, pension plans, asset managers, insurers and some wealth firms. And we deepen the share of wallet with those clients with, call it, 8 to 10 different products, as I said, from advisory to hedging products. Number two, returns strong balance sheet returns. We, on average, make comfortably over 20% ROE in these businesses. And then number three, which, as you pointed out, we actually like the risk in these businesses. Transactions are written in most of the business to a single A or AA equivalent. In securitization, it's more AA to AAA. So we like this. Well, in the loan warehousing facilities or CLO businesses we're always second loss, so obviously, it protects the bank. Now what's also very important is the quality of the people looking after these businesses. Most of the senior leaders have over 20 years of experience, and they either have a credit risk management background. So they actually originally had this in their experience, in their CV. And number two, if not, they are, I would say, highly experienced traders.

So would I be correct in suggesting that the growth is being driven by the nondeposit-taking financial institutions business, the stuff that has become very topical recently?

Yes, that's correct.

Our next question comes from the line of Sohrab Movahedi from BMO Capital Markets.

Rob, just looking at your Slide 13, you've given us the capital waterfall here. We've just talked a little bit about the good loan growth that comes across all the businesses. And as you think about next year, as you think about that ROE kind of build, could we see a situation where your RWA growth is exceeding your internal capital generation? .

Sohrab, it's Rob. Thanks. It's a good question, and it's not certainly how we expect it to roll forward. We continue to see quarterly capital generation -- organic capital generation, something in the area of 10 basis points a quarter. If we think earnings net of dividends ballpark it at around 35, more typical of risk-weighted asset growth before credit migration would be around 25. That's kind of how you get to the 10 basis points a quarter. This quarter, we saw a little bit elevated credit migration related to the housing market being a little bit sluggish. We don't expect any losses on that, but we did have to set some capital aside, but we still anticipate a positive internal capital generation.

Our next question comes from Gabriel Dechaine from National Bank.

First for Frank. Your outlook for impaired provisions lower than losses than we saw this year. I get that. Just wondering what the influence of USMCA difficulties would be, how that would affect that outlook? And then about the capital deployment strategy. No mention of M&A. And I'm just bringing this up to kind of check a box on the list, but just to feel the pulse given the new leadership. What's your appetite for M&A? It can spice things up but can also lead to heartburn.

Thanks For the question. So as I said, entering fiscal 2026, we expect impaired provisions to remain broadly stable in comparison to 2025. And then our base case would say that economic environment should strengthen throughout the year and in particular, the back half of the year, which is why we believe it should actually end up at the slightly lower end of our previous guidance, and that's why we call it mid- to low 30s on a go-forward basis. What we are, of course, looking closely at is although the trade negotiations, but even more so, what happens to interest rates, higher unemployment, and some of the other uncertainties that we are facing. And I think what came through in my prepared remarks is we remain very confident in the strength of our position, where we are from a credit perspective, sorry. And continue to monitor that portfolio performance quite well. It's hard to say where we would end in different scenarios. But what I can say, we have given a little bit of a broader range to reflect a variety of scenarios that we clearly looked at.

Probably not -- you wouldn't get the back half improvement if the negotiations break down perhaps?

I think that's a fair assumption, yes.

And Gabriel, it's Harry here. Thank you for that question. And just around our deployment priorities when it comes to capital, just to reiterate what Rob said and maybe elaborate a little bit. We continue to have that four-pronged approach to capital deployment. And we have the ability to activate all four levers when needed. We're really focused on growing organically, supporting our clients, and we think we have ample opportunity to deploy our capital over time in this respect as we deepen our relationships across our platform. Dividend and dividend growth, and we do that once a year, as you know, in line with our earnings expectations. And you heard Rob speak about that earlier. Our buybacks, which we've been doing and we'll continue to be active in. And this is a method to manage our share count, manage our capital position, but it -- and we have the flexibility to pick up the pace to slow it down if the operating environment changes. And of course, as you alluded to M&A, which would -- as Rob said, would be in capital-light businesses, really opportunistic tuck-ins that are strategically and very importantly, culturally complementary to our existing platform and accretive to ROE over time. So all four levers of this strategy really are tied to our goal of delivering a premium ROE over the medium term. And hopefully, you're hearing that we're running our bank and our strategy in a stable steady, predictable and consistent manner. And that's how we like to run our capital deployment as well.

And our last question comes from Darko Mihelic from RBC Capital Markets.

Just wanted to follow on the question that Mario asked. Christian, you gave a lot of detail, and thank you very much for Slide 44 on essentially private credit sort of exposures. It does elicit a couple of questions for me, though, just to help build the mosaic around these exposures. The first question, Christian, is it's been great growth. It's been very low losses. I suspect you probably would tell me that a stress test loss will also be relatively low. So what is your risk appetite here? You did say it's client-driven. So if this continues to be an area that's hot, how far are you willing to push the envelope and make this a bigger part of your total balance sheet?

It's Harry, Darko. I'm just going to jump in quickly because I think this -- the support of our clients in this segment, the nonbank financial institutions, touches all of our SBUs, but I'll pass it over to Christian to answer your question in a second. The first thing I'd say is, this business reference is really core to our client-focused strategy. We are delivering robust risk-adjusted returns, and it's really aligned to our client activity as clients move from public to private markets, which we're all seeing. This is a broad-based portfolio. And as Christian pointed out, it's highly diversified across geographies, business segments and products and clients. And the underlying loans and structures have a meaningful risk mitigants that we are very comfortable with. We have grown at a very rapid pace over the last while. We came from a very small franchise over years to deepen these relationships with the most prominent players in the space. But Christian, why don't you just take it from there, please?

I think, Harry, you're right. Thank you for the question. As Harry stated, that number I would say, encompasses the entire space of what it is we do at CIBC. You are not going to see, I would say, so much growth going forward. As Harry said, we have been playing a catch-up. We are building a number of businesses in the U.S., power trading. We've applied for primary dealership. We're building a futures trading capability. So we need, I would say, to diversify the resources. We don't want from a risk perspective to concentrate all of our funding, all of our capital in one area. So we're pretty happy where it is. And we should see, I would say the, I would say, low to -- sorry, high single-digit growth in this year.

I will now turn the call back over to Harry for closing remarks.

Great. Thank you, operator, and thank you all for your engagement this morning. I do recognize it's a very busy morning. But I do want to close today's call by thanking our incredible CIBC team. Having engaged with thousands of team members during our leadership transition, the pride and the confidence of our team as in our bank is very clear. Thank you for bringing our purpose to life and for everything you do for our clients, our team and our communities and, of course, our shareholders.

So as we enter the giving season, I want to recognize our team's tremendous commitment to our communities as our team generously gives their time and dollars to make a meaningful difference. From the CIBC Run for the Cure in October to CIBC Miracle Day just yesterday, I'm very proud of our culture of care and the difference our team makes in our communities. And on that note, I also wanted to acknowledge Sandy Sharman, our current Group Head of People, Culture and Brand, who will be retiring from CIBC at the end of 2026. Through Sandy's 19 years at the bank, her contributions have been instrumental in reinvigorating our brand and building out the client focused connected and caring culture that differentiates us today.

And I would also like to welcome Richard Jardim and Yvonne Dimitroff to the executive leadership team at CIBC. Richard will assume the role of SVP, Chief Technology and Information Officer; and Yvonne will assume the role of EVP, Chief Human Resources Officer. Finally, in closing, wishing you and your families a safe and happy holiday season, and I look forward to catching up in the new year. Thank you very much.

This concludes today's conference call. You may now disconnect.

All right. Good morning. Our next presentation comes from CIBC. With us, we have Rob Sedran, Senior Executive Vice President and Chief Financial Officer. Welcome, Rob.

Good morning.

Let's start off with market conditions in Canada. Despite concerns the impact of tariffs, a slowing economy, rising unemployment and the mortgage renewal cycle, results in both consumer and business and government sectors have held up well. Can you talk to some of the factors that you think of driving this resiliency in Canada? And how do you foresee these trends heading over the next 12 months?

Yes. I might challenge that question a little bit in terms of the results have held up well. We think we have had, both in terms of quality and quantity of earnings, quite a strong year. And so on an absolute and relative basis relative to the market. So we're quite pleased with the results that we've been putting out. But I'm not going to challenge the premise of your question, which is the idea that the operating environment has been to say the very least, uneven, and we've been putting up those strong results against that backdrop.

What I would take you back to really for us and what we think is driving the performance, our performance, is just that focused execution of a strategy that we're quite comfortable with and pleased with the evolution of. So when you listen to our conference calls, every once in a while, you'll hear the phrase, the strategy is working. And we're safe -- so when we think about the strategy, the reason we say that the strategy is working is that we're seeing it come through in the numbers. And we believe that it's really related to that underlying focus on execution.

So when we talk about our strategy, we talk about four main pillars. One of them being the focus on the mass affluent and on ultra high net worth and high net worth. And there, we've got Imperial Service as a channel. We've got -- we've empowered that channel with a digital goal planner with an enterprise CRM with a number of AI-powered tools that's giving an awful lot more productivity to that front line. And we're seeing it come through in the results. We're seeing it in terms of the number of conversations that we're having with clients. We're seeing the net investment flows, #1 in the big 5 banks year-to-date on long-term net mutual fund sales. We're seeing good deposit growth, good active checking accounts. And so it's -- the underlying results have been powered by that strategy.

When we think about the digital component of our strategy, we're looking at -- and you can -- the Costco relationship, you can kind of put it in the mass affluent as well, but it's also -- it's a digitally engaged customer base. We're seeing good customer growth. We're seeing the opportunity to deepen relationships. We've invested in a number of tools to be able to fully understand our clients and really get a better solution set to them. And then we've got our Challenger brand simply within there as well, and that one is also generating some powerful returns.

The corporate and commercial bank, the connectivity, we talk about delivering the best of our connected platform there, there's been an opportunity really as we've seen to have -- take advantage of some favorable market conditions and the favorable backdrop for us, we've seen good underwriting growth. We've seen good growth in trading revenue. So just market activity has been strong, and we've really started to see a pickup in lending as well. So we think about all of those factors that are driving the underlying execution of the strategy. It allows us to have a good top line. We're maintaining positive operating leverage by just being disciplined on expenses and having that revenue drive that as well.

And the biggest factor for us has been -- the reason we say that strategy is working is we're seeing the evolution and the migration higher of our return on equity. And that return on equity is allowing us to generate more capital. It's giving us confidence in the earnings power and confidence in the earnings quality of the bank. And so as much as there's some uncertainty in the macro environment, we are sticking close to our strategy, sticking close to our clients, and it's provided opportunities because that uncertainty has increased their desire to have conversations with us, both in terms of the corporate and commercial side but also on the retail side.

All right. Great. I think that's a nice segue kind of into our next question and shift to focus towards CIBC specifically, maybe dig into your ROE. You kind of changed your ROE target at the end of last year, and you're almost there. What factors would drive you to consider re-upping it to a higher target kind of given your progress this year?

The return on equity target that we have was intended to be a sort of through-the-cycle target. So let's step back for a second in terms of why did we change it when we changed it. And the important thing to remember is that when we set the capital -- when we set the ROE target at our 2022 Investor Day, it was based on a certain capital outlook and a certain regulatory framework that's since changed, right? And so we're...

[Technical Difficulty]

So that's all good. The alarm system, at least it's been resolved. So we changed the ROE target because we're carrying a higher capital load. But if anything, we believe we actually increased our ROE target for the underlying profitability of the business because we're carrying an extra 150 basis points of capital for regulatory reasons. We lowered our ROE target by 100 basis points. So that delta of 50 basis points suggests to us that there's a positive underlying trajectory in our return on equity. And it was always intended to be a bit of a through-the-cycle ROE target, which means sometimes you're going to be above it, sometimes you're going to be below it.

Having said all of that, we have seen good progress on ROE, as you pointed out, 14.6% year-to-date return on equity. We do think the strategy, as it's been outlined, will continue to deliver better fee income, deeper client relationships, more of what we call money in. So think about deposits and investments, things that are more ROE favorable. And that, that strategy as it evolves, we do expect it to continue to drive better profitability. The unknown is the capital requirement underneath it. So the way we tend to think of it more is we're looking for a premium ROE. And we think over time, the strategy should deliver a top two ROE in Canada as we continue to just deepen these relationships. So the focus really is on optimizing our capital -- optimizing our balance sheet, optimizing our capital position, deepening relationships with clients, maintaining the positive operating leverage and all of these things -- and normalizing credit over time as well should lead to an improved ROE outlook.

Great. Now turning to credit. Canadian real estate secured lending remains a large portion of the loan portfolio. As mortgage renewals increase and the pace of rate cuts from the Bank of Canada has slowed, though it may increase, do you have any concerns with this portfolio?

Yes. I understand why mortgages are -- can be a focus point for the market. It is a large asset class for us. It's our largest asset class. At the same time, you would have heard on our recent Q3 call, it's roughly -- mortgages represent roughly 10% of our Personal and Business Banking segment's revenue, which suggested that the enterprise level is somewhere in the area of 4% of our overall bank. So it's a product that we focus on for clients that have deeper relationships with us. It's a product that we offer as opposed to the product that we offer. And so we have been really working to manage that volume versus margin trade-off, and we think we've been doing it positively. And you've been seeing it flow through our net interest margin.

From a credit perspective, there's been a gradual increase in delinquency rates. And so I think we're at a 36 basis point delinquency rate. We're not terribly concerned about the credit quality of the book. And in fact, we're quite comfortable with the credit quality of the book. Our net write-off rate is less than 1 basis point. And that's largely because when you think about our -- the loan to values in this. But first of all, we underwrite to the client, not necessarily to the security, but then the loan to value of the overall book, the overall uninsured mortgage book is just -- it's a little bit over 50%. For the impaired book, it's a little bit over 60%. So there's a lot of room there to absorb some of the impairment and not have to worry too much about losses.

It gives us the opportunity to work with our clients, and it gives us the opportunity to wait for the market to recover from a volume perspective rather than having to get aggressive in terms of managing that book. So we -- while the delinquency rates have been migrating a little bit higher, we don't see any material losses coming from the book. We're quite comfortable with the exposure, and we're quite comfortable with the role that mortgages play in our book.

Outside of real estate secured lending, credit metrics in cards and personal lending remained healthy in 3Q. I mean given the recent trends in unemployment, are you seeing anything in Canadian consumer lending that would cause you to be concerned? What measures are you taking to mitigate potential increases in delinquencies?

Yes. The overall book has been generally drifting higher in terms of impaired loss rates. And it's been consistently doing that along with just the unemployment rate. So you're right to call out the unemployment rate. You're right to call out the increase in unemployment rate. It does feel to us like -- absent some major deterioration in the macroeconomic outlook, it does feel to us like we're in a plateauing phase of those loan losses. I -- just given the fact that they didn't spike higher, I think calling it a peak it's a difficult terminology to use because the peak suggests it will come down rapidly after going up rapidly. And it hasn't done that. It's been a much more controlled increase. And we would expect that we're -- like I said, we're somewhere in a plateauing phase here as things level off, absent a material deterioration in the economy.

The thing that we're doing to manage credit losses is really just, again, I hate to keep coming back to just staying close to our strategy. But that -- the best mitigant against credit losses is knowing your clients and knowing who you're lending to. And so the deeper the relationship, the more likely you are to have a better credit outcome. So we're quite -- we're satisfied with the performance of the credit book, certainly against that uneven backdrop that we talked about at the start of our chat here today. We're comfortable with the performance of the book, and we remain comfortable that, that mid-30s in terms of impaired loss rate and basis points that we provided as guidance, we've actually been at the low end of the mid-30s, call it, 32 or 33 basis points year-to-date. We remain comfortable with that mid-30s guidance is the right place for us. And hopefully, at some point, as the economic performance begins to trough and turn positive, that we can start to migrate back to a more normalized loss rate, which we think is lower than where we are today.

One of the major drivers of CIBC's performance over the last year or so has been kind of a material expansion in the net interest margin, both Canadian personal and commercial as well as U.S. commercial wealth. Maybe can you talk about like help us understand some of the drivers to this expansion? Do you think you still have room to go in this environment?

Yes. So I would break down -- in talking about our margin, I would break it down into three main groups, right? One is our positioning. Our hedging and positioning of the balance sheet. It's a so-called tractoring strategy and I'll chat a little bit about that. The second is business mix, which is really being affected by both customer choice, but also the purposeful execution of our strategy and a purposeful choice in terms of how we -- what products we're focused on and what part of the market we're focused on. And then the third bucket is just competitive pricing, the competitive dynamic and a little bit of our own pricing behavior as well.

So let's -- just to break it down into those three. The tractoring strategy -- think about -- it's an oversimplification to think about the 5-year, but it's not a bad rule of thumb to think about the 5-year swap rate as pretty much the rate that you would use to understand when the roll on and roll off of our hedges is going to be a positive versus -- or how long that tailwind can last. And so when we look at that, we see in the '26 it will remain positive and it becomes a bit of a fading tailwind in '27 based on current interest rates. It doesn't really become a headwind beyond that, it becomes more or less of a neutral. So we think there's still an opportunity for that. We've suggested it's a couple of basis points a quarter on prior conference calls. Again, still a reasonable basis from which to start. The interesting part is the second bucket is that business mix, which, again, partly it's client choice around the mortgages aren't growing as rapidly in the sector. The credit card growth is a little bit higher for us. We're acquiring some good credit card customers through our Costco partnership, but also just our own credit cards. And it's also a focus on some of that money in behavior, growing our checking accounts, focusing on deposits as opposed to some of the other product areas. So that's been a conscious decision by us to manage that margin and you've been seeing a significant increase in that profitability. You see it most directly in our personal and business bank but it's happening on both the commercial and corporate as well as the business -- the personal side.

And then the last part, particularly this quarter for us was some promotional pricing rolling off. The competitive environment is -- it's intense, but it's rational. And so product margins are holding in reasonably well. And so some of the product, just the year-on-year or the maturing roll on, roll off even of the product margins has been a little bit favorable. So you put those three things together, and it was a strong margin performance in Q3. And there's nothing that felt terribly unusual in that. And so we sort of use it as a base from which to grow from here. We still think the direction of travel is a positive one on the net interest margin. But it's those three buckets, you never know exactly how business mix is going to roll in and roll off. You never know exactly how the product evolution is going to go. We're comfortable with the tractoring strategy delivering from here, the other things maybe pluses or minuses. But we're -- our view is that the margin that we delivered in 3Q is sustainable, and we should see some growth from there.

Great. In 3Q, commercial loan growth in Canada was relatively healthy. Which areas do you see the best opportunity? Are you seeing the growth opportunity in commercial real estate as well? How would you assess the risk associated with your commercial loan exposure to the current economic environment?

Yes. We're quite happy with the performance of our commercial bank over the last -- well, over the last many, many years. But certainly, in this period of uncertainty, it's given us a great chance to get closer to clients, and it's also given us a chance to get close to a number of prospects that we've been talking to and getting to know for many years. And we've seen the opportunity in this uncertain environment to be able to take a little bit of share as well. So the growth has been pretty much across the board on the C&I side. We've got some specialty lines, including innovation banking and some others that have been doing well and some of the sponsor finance that's been doing well. But it has been broad-based growth in our commercial bank.

The CRE side, not as much. Commercial real estate volumes have been a little bit more subdued. In particular, we tend to focus on some of the larger developers and some of the higher tier developers and they have not been as active in the last little while, and the commercial real estate market in Canada has been a little quieter. So we haven't had as much growth on the CRE side. There's been a little bit, just not as much growth on the CRE side. So it's been a little bit more biased toward the commercial and industrial.

I will say the performance of the book, when you look at our trailing 4 quarter loss rates around just over 10 basis points, 11 or 12 basis points on impaired losses. Part of that is just we've been staying close to clients. We didn't extend ourselves in periods like '22 and '23 when the growth was a little higher. We were trailing the market a little bit. We were decided to build capital rather than deploying too much capital into that market, and we're seeing the benefit of that now. So we're comfortable with our credit exposure. We still think the market is starting to come out of a bit of a hibernation, if you will, earlier this year, particularly in commercial lending, a number of sectors were a little quieter just given the trade uncertainty and the macro uncertainty that we've had. That's starting to lift a little bit. I don't -- I think it's premature to suggest that we can sound the all clear on that front, but it's definitely the tone is a little bit better. And so we're still expecting to see some decent growth from here but we've had a strong year in commercial banking as -- and we expect that performance to continue.

Okay. Great. The Wealth Management segment also showed continued momentum in assets under management and administration. You expect to continue to take share in this business? And would you consider acquisitions or strategic partnerships to further expand the business?

Yes. The Wealth Management side has really been a story of strong distribution and deeper client relationships. It's been a key focus of the strategy to get more and more into particularly that Imperial Service channel and have those advice conversations and have our clients take that longer-term view on the markets, and it's been working particularly through the digital goal planner that we have empowered that channel with to have those conversations. If you're going to do a financial plan with someone, you kind of have to -- if you really want a valuable financial plan, you're giving them your whole financial picture as opposed to just what the assets might be at CIBC. So it's allowed us also to internalize a number of assets. And so that growth has been strong, and we're confident that the -- we're on the right track and that growth can continue.

Part of the challenge, of course, is the market backdrop, and it's been a favorable one. And again, in some ways, against that uneven environment, having the markets continue to rise and be constructive, you never know when that could break or that could change. But on a relative basis, we're comfortable that the strategy is going to continue. On an absolute basis, there is some level of market activity that it's dependent on. So we don't assume we're always going to be hitting new record highs on the various exchanges that's going to continue to deliver. So we have ambitious sales targets for the businesses. The actual growth in terms of assets is going to depend partly on the markets.

When it comes to M&A, this is the one area where we are interested in -- we always refer to tuck-in acquisitions. We're not looking to make big splashes, but the tuck-in acquisition for us to continue to grow a business on both sides of the border, candidly, we look in the U.S., we have a strong platform, roughly $100 billion in assets under administration and management. The RIA channel is one that we want to continue to grow, and it's one that we will be active in at the small end, we're not looking to make any big splashes. On the Canadian side, there's not as much that is available. It's obviously a much more consolidated marketplace but we remain interested in growing our wealth management on both sides.

Okay. Then maybe also moving on to the capital markets business. Despite increased economic uncertainty, revenues in the capital markets business, both investment banking, trading have been strong in the last few quarters. Do you expect this trend to continue in the near future?

Yes. I think it's because of the uncertain environment, right? It's been an interesting year for the capital markets generally. I think Q1 -- every quarter has had its own story as we look at that macro environment. In Q1, there was a bit of pent-up activity. Our fiscal Q1, as a reminder, goes from November through to January. And so there was a bit of a pent-up activity pre-election. I think things have slowed down post the election. We had the -- just a lot of that activity come into the market for what is normally a seasonally strong quarter for us, it was even stronger. Q2 was more of the tariff uncertainty, and it brought an awful lot of activity into the marketplace. Trading revenue was quite strong, even if underwriting and advisory was perhaps a bit more subdued just given a more challenging environment there. .

And then Q3, it's -- I think we've gone to -- it feels like we've gotten to the point where there's just that pent-up activity that was in the pipeline just starts to come through the pipe. And so you saw strong underwriting. You saw strong advisory business and the trading revenue was perhaps not as strong as it was earlier in the year. So it's a nice balance. For us, there's a cyclical component and a structural component to the growth. The structural component to our growth is that we are continuing to expand our platform, particularly in the United States as we grow it organically. Like we're adding people, we're adding capability. And so our year-on-year growth rate in U.S. capital markets was about 30 -- like low 30s percent. It now represents about 1/3 of our Capital Markets revenue is coming from the United States. So there's a structural growth rate story within there, then there's the cyclical growth rate that has advanced that performance still faster. So we talk -- and our capital markets leaders talk about a 7% to 10% annual growth rate. The intention is sort of a match what we think the overall bank can do. Clearly, it's been higher than that year-to-date. And I think it's just been a very constructive marketplace. But I wouldn't want to lose sight of the structural gains that we're making just by some of the expansion plans we have.

All right. Great. And then moving from revenues to kind of expenses. In terms of operating leverage, what levers do you have to continue generating positive operating leverage? Or are you looking to make additional investments? And where do you stand compared to competitors on technology investments?

Yes. The operating leverage is just an operating philosophy for us and the way to protect your operating leverage, and we've delivered it now for 8 consecutive quarters. And every time I say that, I always say we don't promise it quarterly. We do target it as best we can. But our expectation is that we deliver on an annual basis. From quarter-to-quarter, sometimes you can end up in a slower revenue quarter, a bit of a hotter expense quarter. We're managing it well, but we don't promise it from quarter-to-quarter. The best way to secure operating leverage is the plan for a weaker revenue environment that constrains the expenses and feed it into the system if revenues are coming better, are coming in stronger. And that's more or less what we've been doing for the last couple of years. We plan for a lower expense growth rate. But we have things that are on the cutting room floor or on the loading dock, however -- whatever metaphor you want to use, that can then be brought in things that we want to do from a growth perspective, whether investing in cash management systems, whether we're investing more in people, whether we're growing more rapidly on the front lines. If revenues are performing, we can let a little bit of rope into the market into our -- into the bank from an expense perspective. And it's a far easier way to manage operating leverage than it is to suggest that we're going to have a great revenue year. So let's spend a whole bunch of money. The only thing you know for sure is you're going to spend that money. So that philosophy has allowed us to really protect the operating leverage and to find a good operating momentum when it comes to. So it's just an important operating discipline that we see. And again, not promising it every quarter, but it is something that we do target annually, and it's a very important measure for us. When we think about our technology investments, we've been investing at pace for quite some time. And so for everything from -- one of the pillars of the strategy I didn't talk about as much at the start, as we call it, enable simplify and protect. And it's everything from the digitizing to end-to-end process reengineering to our AML and cyber and all the other risks that you have to spend money on. All those programs are more or less at run rate expense growth -- expense rates because we have been investing significantly in the past. And we expect to continue to make those investments in the future. And what the difference now with the new AI tools, the new technology tools that are just coming online is there's opportunity to take out structural costs that might have -- would have been a little bit harder to get at previously. And so we're now looking at ways to take that cost out a little bit more -- to get a little bit more cost out. But for us, when we talk about investing, thematically, we link it to the efficiency agenda, right? Like we're looking to liberate expense dollars that we can reinvest into growth initiatives rather than having some part of the bank in charge of efficiency, another part of the bank in charge of investing. And so we're investing the dollars that we're harvesting.

And so the operating leverage that we've been delivering, we have a good solid year from an operating leverage perspective, that 1.5% to 2% is, we think, an appropriate level to target that allows us to invest what we need to invest, allows us to still get the torque into the bottom line of that good expense control and still keep attention on the efficiency gains that are needed to fund all of this, right? So it's not as much as operating leverage and expense control are a very important theme. It's not dependent on a strong revenue environment to deliver. It can't be dependent only on a strong revenue environment to deliver because you're not always going to have that strong revenue environment. So it's embedded in the philosophy of how we run our plan and how we run our bank.

And speaking further on expenses, CIBC highlighted increased digital adoption and productivity gains through its AI platform. How do you plan to leverage this trend to improve operational efficiency and customer experience? And what new digital capabilities do you expect to roll out in the coming quarters?

Yes. So the first step for us, particularly when it came to AI was to put through a series of governance framework around it. Any time you have new technology, it's important to step back. And before you roll out too many things too widely, to put some rules around how we're going to use it, particularly how we're going to use some sensitive data. And so that -- we spend time just rolling out a governance framework. We're quite happy with the way it's working. We've got an internal generative AI engine now that we use and have rolled out to the entire organization. And we will talk -- and I think it came up on our recent conference call. We've talked about hundreds of thousands of hours saved. The challenge early on we're trying to encourage use, right? And we're trying to encourage the different way of thinking and more of an efficiency mentality in people and let's use the tools to figure out how best to change your own individual job because at the end of the day, the people that can most figure out how to make themselves more efficient are the people that are doing it. So we're empowering them with the tools, and we're encouraging their use. So when we talk about hundreds of thousands of hours saved, you're not going to find that in our subpack somewhere, right? Like it's difficult to draw a straight line from those hundreds of thousands of hours to an expense growth rate. As that matures, though -- and it's also -- if I saved 4 or 5 hours of somebody's time, that's not -- that doesn't really liberate them to do anything other than more of the work they're doing. So it becomes a productivity tool. As these tools mature, though, we should start to see more of that structural cost come out. And it should mean that we scale up better and that we were able to invest and scale up better. So from a digital rollout perspective, we're looking at a lot of -- really, for now, a big focus on the efficiency side and taking jobs that would previously be done by individuals, we're trying to automate and just become more and more on the operations side, on the technology side. Our programmers are using the tool to help them program like they're just becoming much more productive, and we're getting more done. So ideally, you're seeing rather than a widening operating leverage, what you'll see is just a better overall growth rate in the bank and a more sustainable level of operating leverage.

Now moving on to capital, even after 5.5 million share repurchases in 3Q, CET1 ratio remains relatively strong at 13.4%. How do you plan to deploy excess capital in the coming quarters? And are you looking to accelerate the buyback?

Yes. So that 5.5 million shares that we repurchased in the third quarter finished the buyback. And so we re-upped for another 2% as of the most recent quarter, and we will be in market again using it. Now that 2% -- the 2% that we've repurchased over the last year, we announced the buyback, we were at 13.3%. We finished the buyback, we were at 13.4%. So as much as we have been returning capital, the other side of the equation is that we've been growing capital. And so it's not so much that there's not been as much credit growth because we've actually seen reasonably good credit growth. What you're seeing is the benefit of that rising ROE and that increased capital generation that we've been seeing suggests that there's -- as much as we've been giving capital back or returning capital back to shareholders, we've kept a relatively stable CET1 ratio. We've proven in the past and we think our strategy can see us deploying capital from an organic perspective. When you think about what our priorities are clearly organic capital deployment and growing the franchise across all four of our business units, right? When we look at our four operating segments, we think all four of those have growth -- are growth segments and have growth opportunity in front of them and can absorb excess common equity over time in a bit more -- in a more robust economic environment. So choice #1 always is on the organic growth side. The dividend is something that we look at annually, and we had a nice sized dividend increase last year. We'll be looking at it again in Q4. And I think the expectation of dividend growth continues to be one that we have of ourselves and that the market should have of us as our earnings are growing as well. The buyback is sort of that third pillar, and it's active. We expect it to remain active. But for us, really, when we think about the buyback, it's really a concept of balance. We don't want to be overly aggressive on the buyback only to then turn it off later on because we thought opportunities to deploy. The idea of balancing between organic deployment and the buyback and maintaining some flexibility for the execution of our strategy, is what makes a lot of sense to us.

And the last pillar is acquisitions, and we're not looking for transformative acquisitions. We use the phrase tuck-in a lot. And so we always want to make sure we're tempering expectations for how much we can deploy or want to deploy through acquisition. But we feel like our strategy as an organic opportunity in front of it that does not require major acquisitions to continue to advance. And so it makes us a bit pickier in terms of the targets that we work with in terms of the opportunities that we pursue. And when we -- the ROE focus that we have necessarily constrains a little bit of that acquisition appetite because the acquisition math can be quite challenging. And so we look at tuck-ins as something that will be ROE accretive in a relatively short time, and we'll continue to advance the bank strategically. So that financial component is there. So those four pillars are how we think about capital. We're comfortable with the 13.4% we're sitting on. Normally, we would say we would target something around 100 basis points above the regulatory minimum, which is 11.5% today. So that would suggest 12.5% as an operating level for us. We'd be perfectly comfortable being there. But when we think about capital, we think about it in terms of two gates, right? One is the regulatory minimum, which clearly that would suggest 12.5% is a perfectly fine operating level. The other one, and I think it's a reasonable one to consider is just the relative positioning relative to the rest of the sector in Canada. And as much as we'd be comfortable operating at 12.5%, what we really want is to have the front lines, to have our businesses being able to freely pursue the strategy because we do -- we are confident that it can work if we continue to just give them the raw material they need to pursue the strategy. And so we don't want to be too far off of the peer performance simply because it creates noise in the execution of our strategy, and it can disrupt the operating momentum that we think we have. So while yes, we're sitting at 13.4%, we do feel we're sitting with excess common equity. We're not in any big rush to give it back. We think it will -- a combination of deployment and the buyback, we'll draw that down over time.

All right. I just want to quickly touch on maybe the management transition. CIBC made significant strategic progress on the current CEO of Victor Dodig's leadership. How is the current transition to Harry Culham going? And should we expect to see any strategic changes, priorities or capital allocation?

Yes, we're quite pleased with the way the transition is going. It's been, I can say, internally a relatively -- not relatively, it's been a seamless handover as it's gradually happening. Victor's last day as CEO is October 31, and Harry takes over the next day. And the team and the strategy are largely intact. There's always going to be some small changes that happen at these inflection points. But by and large, the direction the bank is taking, we're quite confident. And Harry has been around on the Executive Committee now for a decade. And so he's as invested in the strategy as any of us. So I would say, as we look forward, the focus is going to be on increased -- the next level of focus on client engagement, the next level of focus on operating efficiency and modernizing the banks, the next level of focus on just the human capital and the culture of our bank and really pursuing a number of growth initiatives that we've already got in flight, that's -- that -- all of that is happening against the backdrop of the environment that we're talking about. And so always, you're going to have some changes in execution in terms of how you go about things. But what Victor has done and Victor's era has done, it's given us the -- it's restored our platform and restored our purpose and destiny candidly, on that client focus and that client journey that I think will be something that we can now build on and grow on. And that's the biggest part of Victor's legacy, I think, is that we're positioned to build on what we've done over the last 10 years -- 10 or 11 years and really take it to the next level. We're quite confident that there's as much as we've had a good run, we're quite confident in the future of CIBC.

To close off, I just want to give you the final word, CIBC has delivered a run of solid results driven by steady execution. How confident are you about achieving your key financial targets, including 7% to 10% earnings growth, 15%-plus ROE as you head into fiscal 2026?

Yes. It's a little early to get out into the 2026 guidance land, but I will say that we are confident the quantity and quality of earnings has been strong. We think the sustainability of our performance and the pursuit of our -- the pursuit of the underlying strategy will continue to deliver positive returns for shareholders. We do target that 7% to 10% range. We'll be above that this year, but we do target that 7% to 10% range over the medium term. We do target that 15% plus ROE. Both of those are very important to us. And the third component of that and really a key part of achieving those targets is the expense control and the efficiency initiative that will allow us to generate the positive operating leverage to get there. So the -- we're -- from year-to-year, the macro environment can be positive and negative and things can bounce around. But what's not going to change is our focus on execution and our focus on delivering what we proudly refer to as boring. We think that this consistent and predictable ongoing execution and delivery of our results, it's done well for our shareholders over the last while, and that's what we're looking to continue as we look forward. We're quite optimistic about our opportunities and about our strategy as we continue to execute it.

Great. We have a quick minute left, if anyone open the floor if anyone has any questions. All right. Please join me in thanking Rob for his presentation today.

Thanks, everyone.

This is actually a first for this conference. We have 2 guests at the same time. So we've got Victor Dodig, current CEO of CIBC and his successor, Harry Culham, who will be succeeding him in a few weeks actually.

Halloween.

Halloween. There you go. Victor, very nice to see you.

How are you? Nice to see you too. Good morning.

Good morning. Nice to see you.

How are you?

Good. Good.

Good.

So maybe starting with Victor, probably the most obvious question to ask you is just on any reflections you might have as you sort of look to step away? And a lot to be proud of in terms of how the stock has performed lately. And what are your sort of reflections on what CIBC looks like today versus what it might have been prior to your tenure in 2014 when you took over?

Thanks, Mike. So good morning, everyone. This has been 11 years of this conference. And I wanted to tell you how grateful I am for the support and the feedback that you've given us as a CIBC team.

I want you to remember this. The most important thing is that the team has helped transform CIBC. It hasn't been one person. It's been a team and the individual sitting next to me, Harry Culham has played an important part in that. And when I reflect on what we were able to achieve over just over a decade, from a financial standpoint, our total shareholder returns, while they kind of went through a journey, I would say, on a 1-, 3-, 5- and 10-year basis, they're near the top of the tables.

The last 5 quarters have exhibited improving ROE, and I know that's something that Harry is very focused on as we go forward. That ROE gets to a more and more premium level. Operating leverage has been positive for 8 consecutive quarters. And that financial outcome is really a function of the strategy that we put in place, a strategy that is working on so many fronts. And we'll talk about that in the context of today's discussion.

I think the other thing I'd say that's a fundamental change in our bank is culture. And those are the soft factors, whether it's culture internally and how we collaborate and how our team is feeling about our bank to employee share ownership at the bank improving to rewarding them for great outcomes, to how our clients feel and our client experience scores are the highest they've been. We took our Net Promoter Score from a negative score to bottom of the basement to a good solid #2 with ambitions to be #1.

We've taken our technology platform at the foundational level, and we revamped it. Whether it's CRM, whether it's digital goal planning, whether it's cloud-based computing, whether it's Workday, whether it's a new financial GL, the front end, the mobile apps, I think, are top of the league as well.

There's a lot to do in the middle and I know Harry is going to talk about that a little bit. It's a big focus of his and how you continue to focus on the thick middle, that's changed as well. So in a nutshell, it's a fundamentally changed bank. And we feel very good about where it is today, and we feel equally good about where it's heading tomorrow.

So with that, perfect time to ask Harry to maybe chime in and maybe just talk about your top priorities as you -- big congrats, obviously, on the appointment. Your top priorities at the outset. And if you are planning an Investor Day in 2026, I don't want to front run that. That's obviously a second question is, will investors look forward to an Investor Day where you could sort of provide a bit of a strategic refresh and your priorities as CEO?

Excellent. Well, hopefully -- well, first of all, I'd say I reiterate what Victor said, thank you. Thank you for your partnership, for your support as shareholders. I am privileged to be sitting here in front of all of you and obviously humbled to take on this role.

What I would say is that in terms of near-term priorities, Victor and I have been very, very focused on a seamless transition, really around our clients, around our teammates, as Victor mentioned, and of course, all of our stakeholders, including our shareholders. And it's going well so far. We've got some work to do still, but we're very focused on that in the near term.

And as we look forward, capitalizing on the momentum that Victor mentioned a moment ago is really, really important. As we think about that execution with excellence of our strategy that we believe in as an organization that our team believes in, doubling down on our client focus, our connectivity that we've been talking about for a decade that really delivering all of our bank to our clients in a risk-controlled manner, really, really important.

Victor talked about that middle, that modernization, that drive for efficiencies, the use of new technology is so important as we think about the balance between efficiencies and investment and of course, our human capital. And there's nothing more important than our teammates and getting that productivity up. So those are the priorities as we think forward to enable that strategic execution.

In terms of an Investor Day, I think it will be very important for us to lay out our vision, a continuation of our vision, of our strategy, which has worked so well. And with our executive team over the next while, we'll be coming back to you with a proper date in 2026 to lay out our priorities and our vision as we move forward in the next chapter.

Okay. Awesome. And then I have to ask about the ROE in terms of how you think about it. Obviously, it's been a big focus for Victor. It's a Harry question.

It's a PowerPoint chart.

Got it. But it sounds like it's going to be -- it's going to remain an important driver for you as well and sort of your North Star kind of as well.

Yes, it is.

How do you see ROE? And is it really just a continuation of what the progress you've been making lately, driving it hard?

I use the word continuity a lot. It's really, really important. We made great progress, obviously, with more capital over the last while, hitting 14.6%, Jeff will keep me honest, year-to-date in ROE. We've targeted north of 15%, as you know. And you mentioned the word North Star. It's a bit overused, but we talk about it a lot.

Our executive committee is very focused on it with our finance colleagues driving the bus on this. And so it's very, very important to us that we drive north of 15%, but we're really focused on that execution of the strategy, which enables that ROE to grow. And so that deep client focus, that connectivity we talked about, finding that balance between efficiencies and investments, so important to driving the ROE. And of course, we have the balance sheet management, which can come into play as well overtime.

Okay. Maybe jumping over to a credit question for Victor. And this is, I guess, your opportunity to sort of do the victory lap.

I don't want to do a victory lap.

Well, I mean you should. So I guess the genesis of the question is, if you sort of look at CIBC in historical times, it had been sort of perceived as the bank that might hit a few road bumps in a credit cycle, the bad part of a credit cycle. We're in the midst of a credit cycle, not a horrible one certainly, but the outperformance has been pretty notable for CIBC on the impaired loan PCLs. And I have to ask like what's different? Like what is it that's changed that has made CIBC now the credit outperformer when things get a little bit sort of volatile in the economy?

Mike, it's a good question. It's just worthwhile reinforcing that it's all a function of our strategy. It's a function of knowing who our clients are, knowing who we want to bank and knowing how we want to bank them and living well within our risk appetite. And when we actually do underwrite that credit, having line of sight to making sure that, that actually contributes to an improving ROE.

A lot of it has to do with knowing who our clients are and being selective. And that holds true in our retail business. It holds true in our Canadian Commercial and Wealth business, our Capital Markets business and in our U.S. business. And when we did hit a bump in the road as we did in institutional real estate in the U.S., we quickly course corrected. And we've actually been shifting the portfolio away from some of those assets into a more diversified portfolio. But it's all rooted in our strategy and how we do business.

And I think, Harry, you can double-click on that. I mean you've been pretty focused on doing that in capital markets and echoing that across the bank in your tenure.

Yes. No, I think I do believe that deep relationships are at the foundational level when it comes to risk management. You know who to call. You know exactly what your clients are up to. And so it's the best way to manage risk is to know your clients really, really well.

And that connected nature across our bank, delivering all of CIBC to our clients matters, coupled with the technology to actually understand the analysis, the analytics around our clients is really, really important. So we measure every single dollar of capital that goes out the door where it goes, and we look back on a regular basis to understand the returns, but also the risk. And every discussion that we have is around our clients is also around the risk. And as we look forward, growing our bank in a risk-controlled manner is really, really important. You've seen the results of that over the last many, many quarters and years, in fact.

Awesome. Maybe on capital deployment for Harry. Obviously, I think, Victor, I can almost say verbatim what your capital priorities are because you've been so consistent in that message. But obviously, organic growth is number one. For Harry, how do you sort of think about buybacks maybe being amped up a little bit, maybe even M&A, whether it's tuck-in and maybe we can get a bit more of a detailed discussion on the M&A potential. But if you do get an environment here where maybe the loan growth just is not being as -- not recovering as quickly across your business lines in Canada for the foreseeable future, does that sort of make you more likely to do perhaps more M&A or buybacks?

So the first thing I'd say is I've had the privilege of sitting with Victor for 11 years next to him. So the strategy that we have is developed by our executive team. And the strategy encompasses where we deploy our capital, how we deploy our capital. And that has evolved over time, obviously, as the world changes, but we're in a position now where we have obviously excess capital. We feel very good about our capital levels. We also feel very good about where we're headed over time.

Priority #1 is organic growth. We're really focused on devoting capital to our core clients, the millions of core clients that we have across all of our lines of businesses. And we've got great momentum, as you saw over the last many quarters in deploying our capital to our clients. And so that would be priority #1.

Of course, again, we want to continue to invest in our bank into the infrastructure of our bank. That's very, very important. The drive towards efficiency, to drive towards modernization, very, very important. So it's clients, it's modernization of our bank with a really good balance.

And then, of course, we've got dividends. We've got return of capital to shareholders and buybacks that you mentioned. And I see Rob Sedran over in the corner frowning at me, making sure I'm going to say the right things. But as CFO, we're all over this. We talk about it all the time. We're clearly focused on utilizing our buyback capability. We renewed our NCIB, as you know. And we have flexibility. So we have flexibility around where and how we deploy our capital and the timing of how we deploy our capital.

In terms of M&A, another lever, of course, we've been very focused on tuck-in acquisitions. We've had some very good success south of the border with respect to our Wealth Management franchise. I think we've been quite vocal on the growth of our wealth management business, higher ROE businesses in general, and we could talk more about that across various different businesses. That's where we're going to continue to deploy capital. But I would look at it more as tuck-in opportunities that are accretive to ROE over the medium term. So no surprises. more of the same. We speak the same voice having sat next to each other for 11 years.

Victor, maybe one to you on the Canadian business. Just in terms of what CIBC does differently without revealing too much of that secret sauce, but obviously, it's been working and you're not chasing volume. Maybe just talk about what it is that you specifically do for clients that gets them to develop those deeper relationships with the bank. It's always a loaded question.

No, it's not that loaded. It's a good question, Mike. Our retail bank is a crown jewel for our bank. It is a big driver of returns. It's a big enhancer of our multiples. And we've worked together with the entire team to get it to a whole new level. So it all starts with our people and a real focus on serving our clients. That culture of how we serve our clients, how we respond to client issues, how we respond and embrace client opportunities is something that kind of beats at the center of CIBC's heart. I really mean that.

So what have we done around that? We've built good technology around that, whether that's harnessing our data assets, using CRM in a client-friendly way, putting out a digital financial planning platform that is proven to improve Net Promoter Scores, that is proven to improve client share of wallet. So when a client goes through CIBC GoalPlanner and they actually do a retirement plan as well, their Net Promoter Score goes as high as 85. That's a big deal.

Then within that business, there is a big, big focus on the mass affluent and the rejuvenation of the Imperial Service. which is a capital-light business, which is primed to grow significantly going forward because of the investments that we've made, both in our people and our technology. Alongside that, you have a digital acquisition platform through Simply, through Costco and quite frankly, through the mainline bank. Those clients come in the front door, and we seek to franchise and to build relationships over the long term. That, in a nutshell, who CIBC is at retail. It's not led by price. It's not led by product, but there's a real thoughtful client relationship-oriented approach to running our bank. And that, I think, permeates through the entire bank.

Maybe switching over to Harry, just on commercial banking and wealth, like that connectivity in Canada, as you step into the CEO role, what do you have any thoughts to offer on that? I know it's an important aspect of every bank strategy, getting that continuity, the connection between the client base. How do you see that sort of evolving for CIBC?

It's just how we operate every single day. It's how we talk about business. It's how we just work with our clients. We expect our entire organization to be delivered to our clients. It's just part of the DNA of the organization of our bank. We've been doing it for a long time.

It's interesting, Victor, you go back and Victor and I both read volume 5 of our history, 1973 to 1999. We were innovative. We're client focused. We're team focused. We had an excellent culture. We've got that back now. And now we're focused on that momentum and going to the next level around that connectivity.

So Commercial and Wealth is a perfect example where -- these groups work together hand in hand. The referrals between the 2 is exceptional. It's growing. It's growing regularly, both north and south of the border. It also is growing with capital markets. So it isn't a relationship manager's job just to deliver capital markets products. It's also to deliver everything our bank can offer to the C-suite to the average client out there, an important client of ours that they see the entire bank. So that connectivity really does work for us. It's how we operate day in and day out. It's been part of our history.

And when we took that what was seen as an unorthodox step of putting together Commercial Banking and Wealth Management, there's a little bit of trepidation from investors partially because you can't compare us to the other banks as directly. But why are you doing this? Nobody else does it this way? I mean our view, and some of this comes from our discussions day after day around the market going more and more private.

As the market goes more private, you have entrepreneurs, you have private sponsors that are involved in creating value. When that value gets unlocked, we want to be there to help them with their wealth management. And we have countless examples of clients who have come to us, who've sold their businesses, either all of their businesses or part of their businesses and their wealth management comes to us and we manage that for them.

I might add just on Mike did ask, we've seen hundreds of clients together as we transition. And many are commercial and wealth clients, and we have an office set up to ensure that this is really functional. And time and time, we hear it again that they require service in the wealth space as an example, if you're a commercial client. In fact, I think about 1/3 of our commercial clients have a wealth relationship with us.

Okay. Harry, just on the RESL exposure. And I guess this is also one of those legacy things which is quickly dissipating. I don't think people look at CIBC the same way in terms of the fact that it has a bit more RESL exposure in Canada as being necessarily a negative. Obviously, the spreads in that business don't tend to be too high. And I think Hratch has been clear on recent calls that it's a lot smaller of a contributor to the retail business. But what would you sort of say to some maybe detractors that still look at CIBC and say, "well, too much RESL exposure, Canadian housing is not looking so great right now." Any thoughts on that?

I go back to the comments that Victor made earlier about our ability to manage risk and adjudicate. We're really good at it, and we've proven that through cycles. And so we're really pleased with that first instance.

Second thing I'd say is that it goes back to our strategy, building deep relationships with those 13 million clients we have, franchising those clients. That's really, really important, understanding your client base. We use a lot of data. We use a lot of analytics to understand our client base to also understand how we can franchise them if they're not.

We're also focused on, from RESL perspective, the renewal space. Everybody has read about the size of the renewals coming about. And we're very focused on retaining the most valuable clients. So that trade-off between revenue and returns is really important to us. And our core client base will fight day in, day out to ensure that we maintain those relationships at the highest level. Very, very important.

I think we'll grow at and around industry average. We'll keep up with the industry, but it's more about generating the returns and building for the growth of the future around franchising that's really got us to a good place in the moment, and you see the results. And I think having Hratch, our former CFO, very focused on strategy, very focused on the numbers, leading that business has been exceptional.

Okay. Maybe switching over to the U.S. business, probably for Victor. Obviously, a lot of changes over the years, a couple of acquisitions just to beef up your capabilities there. I know you've talked a lot about the cross-border dynamic. Maybe talk about the U.S. strategy at a high level. Where is it sort of heading? I know you're kind of stepping away as CEO, but what did you set this business up in terms of the direction it's going in? And what is it going to look like in 3 to 5 years?

Sure. So if you just go back 11 years, less than 2% of our profits came from the United States. Today, it's $1 in every $5, give or take, a quarter depending on how it performs. Our goal was to, a, diversify our bank, not simply for the purposes of diversification, but to be able to follow our clients in a North American economy. A lot of money continues to move north, south, and I fundamentally believe that will continue to be the case once the tariff discussions kind of get to a different phase. So we're well positioned to serve our clients.

We also took the step of building a business that doesn't replicate reflect what we do in Canada in terms of our footprint, right? We consciously avoided retail in the U.S. We think retail is a highly competitive world. We think retail is going through this massive transformation as we see in our home market and decided to focus on what we would largely call the private economy, entrepreneurs, commercial banking and wealth management. We did that through the acquisition of the Private Bank, which I think has gone very well. We did that through the several acquisitions in the wealth management space, which is now in the $100 billion zone. There's more to do. I think it's still subscale relative to where it could be. And I know Harry and the team will be focused on that going forward.

And we did that with our capital markets business, and Harry can speak to that as well, which is, again, focused on our clients focused largely on the private economy, private sponsors, private business owners and working our way to an ROE that on a blended basis is currently well over 10%. In the Commercial business, it's lower than 10% because of the goodwill. Now we'll work our way toward a better place. So that would be, I think, the story going forward.

In the most recent past, we've invested significantly in the backbone of the bank, which should send you signals that our plans are to grow organically. In the next several months, we're launching our mobile platform that we have in Canada, the U.S. version of it, which will help our private banking franchise grow and attract more capital-light business like deposits as well as asset management and other wealth management-oriented products and continue to focus on those clients that do treasury with us and lending with us and ancillary business with us and capital markets to get that ROE to a better place.

And I think, Harry, you're going to continue on that path. And I know you're very focused on getting that ROE on a full basis, not just tangible to well over 10%.

Absolutely.

Maybe switching over to cap markets. Obviously, your neck of the woods, Harry. What's the strategy in cap markets, like just high level and why has it been working? I know there's been a much more strategic approach to the U.S. part of the business. Maybe talk about just overall where you see the business going and then speak specifically, if you can, on the U.S. side as well. Obviously, the bank has had different levels of exposure and breadth in the U.S. cap markets business over the very long term. And it seems like it's a lot more concentrated now to the betterment of the bank.

We had the opportunity to rebuild the capital markets business 15 years ago. And for the last 10 or 12 years, I think we've outperformed our peers. And in terms of revenue NIAT, pre-provision, pretax earnings basis, all based on delivering the entire capital markets platform and our bank to our clients. And that's worked really well, highly connected back to front, infrastructure, et cetera, risk management. So you've seen returns that are outsized, and I believe that they will be consistent. You've seen a focus on this spin around where resources go. I mentioned that earlier. And I think underlying all of that is culture. Victor mentioned culture a moment ago.

If you look at the capital markets business, it's a client-driven business. It's all about culture. It's about how you do business day in and day out as part of CIBC, our bank. And so that's really, really important and highly connected with our commercial bank, both north and south of the border and highly connected with our wealth franchise. And by the way, from a technology perspective, often street leading. And so we feel really comfortable about the infrastructure, the culture, the breadth of the business, the continuity of that business.

I might add also that my deputy for the last year is Christian Exshaw, who is now taking -- has been announced to take over Capital Markets. And the same leadership team is in place. And so you should continue to see consistency of sustainable growth over time in a risk-controlled manner in the capital markets space.

In terms of the U.S. About half of the business in the U.S. is capital markets related, about half is commercial and wealth. We've seen outsized growth in the U.S. on the back of opportunity. We've been expanding in the U.S. for a number of years with our clients. Our clients are active in the U.S. in the industries we know well. We are not trying to be all things to all people. That's not what we're trying to do. We're trying to drive really strong returns with deep relationships in areas we know well in a risk-controlled manner, and that will continue. So we're pretty excited about it.

I'd love to ask a follow-up just on that connectivity. And obviously, there have been a lot of changes since Victor became CEO in 2014. Any examples you can give on what you've sort of seen operationally that's really changed things?

Since Victor came in?

Yes.

Well, listen, we put the pin on. We're all -- this is a CIBC pin. It's not a Capital Markets pin. And by the way, if you ask anybody, they'll say the same thing. So we work for our bank and with a great history and a great history of working with our clients, with our team, our culture, et cetera. We've got a run for the cure coming up in a few weeks' time. Hopefully, some of you will be there. And just things like that matter. They've always mattered to CIBC. Victor emphasized that importance of our cultural connectivity.

I would say what we learned over the last decade under Victor's leadership was everybody matters. So when you got up in the morning in April of 2020 and the world was falling apart, we knew that the infrastructure teams were all there. They're all there helping deliver for our clients, for our shareholders, for all of our stakeholders to ensure that our bank was going to be there when it was required to be there. And so we've proven, I think, over cycles now that, that culture of connectivity under Victor's leadership, leading with our clients first matters. And that now you're seeing it come through in the results.

Great. On AI, maybe starting with Victor, I'd like to get some color from both of you, gentlemen. But on AI, Victor, maybe in terms of the journey on AI, I know it's still a developing part of the bank's story, both on the cost side and on the revenue side. Where do you see sort of CIBC sitting in that dynamic? Like do you see yourself as being a little bit ahead of industry, kind of in line with the industry? Or are you doing some sort of secret of things in the background that we're about to get excited about when we see the Investor Day in 2026?

There's no secret of things that are going on. We have a history of embracing technology and ensuring that our technology strategy reinforces our business strategy. And it's no different with artificial intelligence. The first thing we stood up was governance around AI, governance around data, governance around the use cases. So not everyone is running here or there and everywhere. So we put some order in our house. And that's what we do, and that's how we operate the business.

We have created our own CIBC AI, which we call CAI, which is our own internal large language model. We draw on the resources that are outside, but we can do things with our own data, with our clients in a private fashion.

We've actually organized everything, I'd say the use cases into 3 main buckets. First bucket would be efficiency. And that efficiency, you'll see in the contact centers over time, internal and external contact centers. You already see that in the coding activity of our programmers in the early days. there are other buckets in KYC charting notes for our advisers and how that will help them become more efficient. And we don't talk about this is going to eliminate jobs. It's going to change the nature of work and actually make working at CIBC even more interesting because they'll take the sand out of the gears.

The second bucket would be defense, and that would be on the fraud front and on the AML front. And the third piece would be on growth and how do we use it for growth. And I think we're focusing on things in that specific order, get the efficiencies, get the sand out of the gears so that work becomes more interesting and more meaningful for our people. And then we'll -- and we're focusing on defense as well, then we'll start focusing more on growth.

And I know Harry is very focused on how can we do this in a way where the entire team rallies around what we're doing without their arms folded and saying, "I don't want to be part of this." And all of our team, I can say unequivocally, is engaged.

Well, I think we've had 48,000 team members trained in AI over the last year. So it's top down, bottom up, everybody is engaged. And it's going to change the way we work over time, no doubt. It's already having an influence. So we're really trying to be in the forefront.

Got it. Well, thank you, gentlemen. As we sort of wind down our time slot here, some final words, maybe starting with Harry, and then we have to give the last word to Victor, who's going into his retirement soon after a very amazing run at CIBC, especially in the last few years, given the stock prices' outperformance. So maybe starting with Harry. any key messages from me?

Well, I think the message is continuity, continuity in the momentum and the trajectory we're on and hopefully, we can take that a little higher with some of the things we've talked about today.

I think the team is highly engaged, highly engaged with our clients, highly engaged with all of our stakeholders back to front. infrastructure, front office, et cetera. So we've got an engaged team. The culture is excellent. We're in a good spot.

And I'd just like to thank all of our shareholders for your engagement over the years. I look forward to partnering with you as we move forward, and we're always accessible. So maybe I'll pass it over to Victor for that.

All I'll say is thank you. Thank you for being there. Thank you for the hard questions. I didn't get too many softballs from many of you. I want to tell you that it's a privilege to be in this role.

Canadian banks play an incredibly important role in our economy and our society. And to be able to work with my team, our team to take CIBC to a whole new level has been a real positive life because in the end, we're there to serve our 13 million clients. We're there to serve and make sure that our 50,000 employees have a stable and growing paycheck in a way to look forward to the work each and every day. We've created, I think, a return profile that our investors are proud of. We give money back to the community. And this is the perfect time for Harry and the team to take it to a whole new level. And I will be screaming from the rooftops, a proud alumnus and a proud ambassador and always bleed color red. Thank you.

Thank you very much, gentlemen.

thanks, Mike. Thank you.

[Foreign Language] One a day. Thank you very much. Thanks. So with that, we'll go to the lunch break now, and we'll come back with Peter Rutledge, Superintendent of OSFI at noon for a Q&A.

Good morning. Welcome to the CIBC Q3 Quarterly Results Conference Call. Please be advised that this call is being recorded.

I would now like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations. Please go ahead, Geoff.

Thank you, and good morning. We'll begin this morning's call with opening remarks from Victor Dodig, our President and Chief Executive Officer; followed by Rob Sedran, our Chief Financial Officer; and Frank Guse, our Chief Risk Officer. Also on the call today are a number of our senior executives, including Harry Culham, our Chief Operating Officer; Shawn Beber, U.S. Commercial and Wealth Management; Hratch Panossian, Personal and Business Banking; and Susan Rimmer, Canadian Commercial Banking and Wealth Management. They are all available to take questions following the prepared remarks.

We have a hard stop at 8:30, and we'd like to give everyone a chance to participate. So as usual, we ask that you please limit your questions to one and requeue in the Q&A. We'll make ourselves available after the call for any follow-ups.

As noted on Slide 2 of our investor presentation, our comments may contain forward-looking statements, which involve assumptions and have inherent risks and uncertainties. Actual results may differ materially.

I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. Management measures performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance.

With that, I'll now turn the call over to Victor.

Thanks, Geoff, and good morning, everyone. I'd like to begin the call today with three key messages. The first message is that our client focus and execution mindset has culminated into another clean quarter with strong performance across all of our business units in the third quarter.

The second message is that our strategy is working and we're well positioned to continue relative outperformance. The depth of our client relationships, our strong balance sheet and our robust capital position are serving us well. We're resilient and we're prepared for shifts in economic conditions.

And the third message is our CEO transition continues to progress very well.

Today marks my final earnings call as CEO of CIBC. And on November 1, I'll pass the baton to Harry Culham with confidence, knowing that our bank is in good hands. The leadership announcements we made earlier this month will further accelerate the execution of our strategy under Harry's leadership and provide strong continuity across our leadership team entering the new fiscal year.

So let's move on to highlights from our adjusted third quarter results. We delivered net income of $2.1 billion, which is up 11% from the prior year and earnings per share of $2.16, up 12%. Pre-provision, pre-tax earnings were also up 12%, supported by broad-based growth across all of our operating units, healthy margin expansion and the 8th consecutive quarter of positive operating leverage.

Our credit portfolios are resilient, and they are performing at the favorable end of the guidance that we provided at the start of the year. The relative and absolute strength of our credit quality is a direct result of prudent underwriting and advanced analytics. It's equally a reflection of our disciplined client focus and deep client relationships.

We know our clients well. We know their businesses, their industries and their growth ambitions. And this allows us to make thoughtful credit decisions with a long-term view.

Now moving to capital. We ended the quarter with a robust 13.4% CET1 ratio, while repurchasing 5.5 million common shares during the quarter. Our excess capital position provides us with flexibility. We have the resources to support our clients' growth ambitions going forward, while continuing to optimize our capital position. And to that end, as we continue to return capital to our shareholders, we've also announced our intention to launch another normal course issuer bid for 2% of our outstanding common shares.

Even with our elevated capital buffer and cyclically higher PCLs, we generated a return on equity of 14.2% this quarter, which is up 20 basis points from the prior year. This marked the 5th consecutive quarter of year-over-year ROE improvement. And our team remains laser-focused on achieving our ROE target over the medium term, and we have the full confidence in the earnings power of our bank. By consistently executing against our client-focused strategy, we will continue to deliver the profitable growth that our stakeholders expect from us.

So here are a few recent examples of our progress. The first relates to launching innovative solutions to bolster our advisory businesses, particularly in our Mass Affluent & Private Wealth Franchise. This quarter, our Asset Management team launched the CIBC Education Portfolios. A suite of five portfolio solutions designed to simplify education savings for Canadian families. We also launched -- announced the launch of a new dedicated Business Banking program that's tailored for skilled trades professionals. Our differentiated solutions for key client segments will continue to support our growth momentum in capital-light fee income-based businesses.

And this week, we announced an innovative new checking account that recognizes our clients' relationship with us at each stage of their financial journey, reflecting our relationship-oriented approach, the tiered CIBC Smart Account, provides clients with more benefits as they deepen their relationships with us.

The second example relates to our focus on expanding our digital-first banking capabilities for our clients. Earlier this quarter, we were recognized with the highest ranking in customer satisfaction for both Online Banking and Mobile Banking among Canada's five big banks in the latest J.D. Power study. Our deliberate client-centric digital focus ensures that we exceed our clients' evolving expectations in a rapidly changing technology landscape. Our Digital Registration hit an important milestone this quarter, surpassing 10 million clients and encompassing 81% of our eligible client base, both highest to date.

And finally, the third example is we're delivering connectivity and differentiation to our clients, that benefit from everything that CIBC offers to meet their unique needs. This commitment to connectivity is driving real results.

On a year-to-date basis, CIBC Capital Markets has a leading market share position with our strategic clients. Our capital markets franchise is also seeing strong momentum in the U.S. as we build our North American platform with revenue growth in the region, up 37% year-to-date. This franchising focus is also growing cross business referral volumes in the U.S. business, which are performing well above our targets and up 25% on an annualized year-to-date basis.

These achievements underscore the impact of our collaborative approach at CIBC and our ability to deliver value across geographies and across our businesses.

Underpinning this progress is our commitment to enabling, to simplifying and to protecting our bank. This quarter, our AI-powered voice assistant was recognized with the 2025 Digital CX Award for the Best Use of AI for Customer Experience. Our CIBC AI platform, which we call CAI, C-A-I, was also recognized with the Best Gen-AI Initiative Award, marking the 2nd consecutive year we received this honor. Since its launch, this platform has transformed the way our CIBC team members across our businesses work and has saved an estimated 600,000 hours.

And going forward, we're going to continue to drive further innovation across our bank in our AI journey under Harry's leadership.

We're moving our bank forward, even as the operating environment remains uncertain. Global trade tensions may result in slower growth and higher inflation in many countries, including Canada and the United States. However, we anticipate that declining interest rates will help support economic growth. While fiscal policy will offer targeted relief to the sectors most affected by trade negotiations.

As the global trade environment becomes clearer, we expect increased client activity and we remain well positioned to capture emerging opportunities through our diversified platform. And regardless of what the macroeconomic environment serves up, we're going to continue to execute against our strategy. We're going to continue to support our clients. We're going to continue to control what we control and position CIBC for continued strength.

So in summary, we are continuing to outperform through the cycle. I mean trade disputes, geopolitical tensions and economic uncertainty, the CIBC team has demonstrated improving profitability, top-tier credit quality and robust top line growth. Our core businesses have clear momentum and plenty of runway to continue delivering for all of our stakeholders.

And with that, I'll pass it off to Rob to review our financial results in greater detail. Over to you, Rob.

Thank you, Victor, and good morning, everyone. I'm also going to start with three takeaways from our financials. First, we produced another quarter of broad-based double-digit organic revenue growth and earnings growth as well as strong returns driven by the focused execution of our strategy.

Second, we continue to deliver positive operating leverage, enabled by business momentum and the benefits of our long-term investments in digitization, AI and other technology as well as prudent expense management.

Third, we completed our normal course issuer bid for 20 million shares in Q3 and have announced a new program as we continue our balanced approach to capital management. Our balance sheet remains strong with ratios that are well above our normal course operating targets.

Please turn to Slide 8. For the third quarter of 2025, earnings per share were $2.15 or $2.16 on an adjusted basis, supported by strong revenue growth in each business, expense control and stable credit trends. Our profitability continues to improve with an adjusted ROE of 14.2%, up from 14% in the same quarter last year. Year-to-date adjusted ROE is 14.6% compared with 13.8% for the same period last year.

Let's move on to a detailed review of our performance. I'm on Slide 9. Adjusted net income of $2.1 billion increased 11%. Expanding margins, volume growth and disciplined expense management allowed us to maintain revenue growth momentum, deliver positive operating leverage and continue to drive strong pre-provision earnings growth at 12%. The total provision for credit losses was up 16% from a year ago, though with impaired losses remaining well within our previous guidance range. Frank will discuss credit in detail in his presentation.

Slide 10 highlights key drivers of net interest income. Excluding trading, NII was up 13% driven by continued balance sheet growth and expanding margins. All bank margin ex-trading was up 10 basis points from the prior year and up 6 basis points sequentially.

Canadian P&C NIM of 281 basis points was up 8 basis points sequentially, reflecting the ongoing execution of our strategy. The key driver of the increase was deposit margin expansion supported by higher rates as well as the impact of favorable business mix as we continue to effectively balance volume and profitability, while deepening relationships with our key clients.

In the U.S. segment, NIM of 378 basis points was up 6 basis points from the prior quarter, owing to continued strength in deposits. In both Canada and the United States, we expect margins to move gradually higher from these levels based on the current forward curve.

Turning to Slide 11. Non-interest income of $3.2 billion was up 4%, helped by constructive markets, market-related fees increased 10%, with particularly strong growth in underwriting and advisory fees and mutual fund fees. Transaction-related fees were down 6%, owing to last year's benchmark reform, partly offset by higher card and deposit fees.

Slide 12 highlights our ongoing balanced approach to expense management. Excluding performance-based compensation linked to the strong revenues, expenses grew 4% as investments and core operating costs were partly offset by the benefits of prior initiatives to improve efficiency while still investing for growth.

Slide 13 highlights the strength of our balance sheet, strength that gives us the flexibility to support our client-focused strategy and return capital to shareholders. Our CET1 ratio at the end of the quarter was 13.4%, stable quarter-over-quarter. Solid organic capital generation was offset by our ongoing share purchase program. During the quarter, we returned $1.4 billion in capital to our shareholders, including over $500 million of share repurchases. Our liquidity position remains very strong with an average LCR of 127%.

Starting with Slide 14, with Canadian Personal and Business Banking, we highlight our strategic business unit results. Adjusted net income of $817 million increased 17% due to higher revenue growth, partially offset by higher expenses and the total provision for credit losses.

Supported by core business momentum, pre-provision, pre-tax earnings were up 18% as our client-focused strategy continues to deliver results. Revenues were up 10%, helped by margin expansion, loan growth and stable deposit balances.

Net interest margin was up 27 basis points year-over-year and 11 basis points sequentially, reflecting the continued benefit from the rate environment and the successful execution of our strategy.

Beyond the benefit from rates, we are seeing tangible results from our focus on deep and profitable client relationships, selective balance sheet deployment and disciplined pricing decisions. We continue to expect margins in this segment to trend higher. Expenses were up 3% due to investments in strategic initiatives and higher employee-related compensation.

On Slide 15, we show Canadian Commercial Banking and Wealth Management, where net income and pre-provision, pre-tax earnings were up 19% and 16% from a year ago, respectively. Revenues were up 13% from last year.

Wealth Management revenue growth of 15% was driven by higher average fee-based assets resulting from market appreciation and net sales and increased client activity driving higher commissions.

CIBC Asset Management ranked 2nd among the big six banks and retail mutual fund long-term net sales in the current quarter and on a year-to-date basis, demonstrating the power of our distribution network and advice-driven strategy.

Commercial Banking revenues were up 10%, driven by volume growth and margin expansion. Commercial loan and deposit volumes were up 10% and 8%, respectively, from a year ago. Expenses increased 11% from a year ago, mainly from higher compensation linked to the strong Wealth Management revenues as well as higher spending on technology and other strategic initiatives.

Turning to U.S. Commercial Banking and Wealth Management on Slide 16. Net income was up 15% from the prior year, mainly due to lower loan loss provisions and a 7% increase in pre-provision, pre-tax earnings. Revenues were up 8% from last year. Deposit growth of 13% and loan growth of 3% resulted in net interest income that was 14% higher than the prior year. Expenses were up 8% with the increase largely related to performance-based compensation.

Turning to Slide 17 and our Capital Markets segment. Net income was up 43% year-over-year. Revenues were up 24% from the same quarter last year as Global Markets revenues were up 18%. Corporate Banking benefited from higher volumes and margins and Investment Banking achieved record revenues on the back of higher underwriting and advisory activity.

We continue to expand in the U.S., where year-over-year revenue growth of 32% contributed 34% of total segment revenues this quarter. Our highly connected platform continues to deliver for our clients and for our bank. Expenses were up 11%, largely due to higher performance-based compensation, continued investments and higher volume-driven expenses.

Slide 18 reflects the results of the Corporate and Other business unit. A net loss of $108 million compares with the unusually high net income of $96 million in the prior year, a move that comes from a normalization of treasury revenues from the elevated level we described last year and non-core securities write-downs at CIBC Caribbean, as well as the impact of foreign currency translation.

Were it not for the write-downs we would have been inside our guidance range and so maintain our medium-term guidance of a loss of between $0 and $50 million for this segment.

In closing, we had a very strong third quarter. Amidst the dynamic operating environment, we remain focused on executing our strategy, delivering sustainable results and strengthening our bank's position for the long term.

With that, I'll turn it over to Frank.

Thank you, Rob, and good morning, everyone. Our Credit portfolio performed well in Q3 despite the evolving macroeconomic backdrop. We are actively monitoring our portfolios and taking management actions to mitigate risks. Our teams remain close to our clients to ensure they have the support they need to effectively navigate through the uncertainties. Our allowance for credit losses remains robust, preparing us to manage a variety of potential risks or challenges ahead. We remain comfortable with our impaired loss ratio that continues to be at the lower end of our guidance.

Turning to Slide 22. Our total provision for credit losses was $559 million in Q3, down from $605 million last quarter. Our robust allowance coverage further increased quarter-over-quarter by 1 basis point to 78 basis points. And year-to-date, our total allowance is up by $474 million or 12%. Our performing provision was $78 million this quarter as we continue to reflect the evolving economic environment. Our provision on impaired loans was $481 million, up $18 million quarter-over-quarter. This was due to higher provisions in Capital Markets, partially offset by lower provisions in the other SBUs.

Turning to Slide 23. Overall, Q3 portfolio performance remained stable and in line with our expectations, with our impaired provisions at 33 basis points. Personal and Business Banking impaired PCL was flat with higher write-offs experienced in the quarter, offset by a lower allowance increase for impaired balances. Capital Markets impaired PCL was up in Q3, mainly driven by one name. The balance of this portfolio continues to perform well with no systemic risk seen in any specific sectors. Both Canadian and U.S. commercial, we saw improved performance with a lower impaired PCL in Q3.

Slide 24 summarizes our gross impaired loans and formations. Our gross impaired loan ratio was 56 basis points, down 1 basis point quarter-over-quarter, with the decrease in business and government loans, partially offset by an increase in retail. While mortgages experienced a moderate increase this quarter, our current loan-to-value ratio for the mortgage book is at 54% with impaired balances remaining low at 63% LTV, and we do not expect any material increase in losses.

Slide 25 summarizes the net write-offs and 90-plus day delinquency rates of our Canadian consumer portfolios. Our net write-off ratio remained flat quarter-over-quarter. So we continue to see this impacted by elevated unemployment rates. The 90-plus day delinquencies of our credit cards and personal lending portfolios trended lower, while mortgages was up moderately. We are pleased with the performance of our personal banking book, and we are confident we will continue to see resilience given the strength of our Canadian consumer portfolios.

In closing, we are pleased with our credit performance in Q3. With the dynamic changes in the macro environment, we remain disciplined and prudent when managing our portfolios. Our robust allowance levels provides coverage for ongoing headwinds and we remain well within our full year guidance on impaired losses.

I will now ask the operator to open the line for questions.

[Operator Instructions] Our first question comes from Sohrab Movahedi, BMO Capital Markets.

Firstly, Victor, congratulations and thank you for putting up with me over the years. A quick question is that, Rob, you completed the NCIB, you've renewed it. Is it your intention to complete the renewed one? And is this, I don't know, should I interpret this as confidence in the earnings trajectory of the bank?

It's Rob. Yes. So we bought back, as you pointed out, 5.5 million shares during the quarter. We completed it and have re-upped. When it comes to the buyback, we kind of view it the same way we view the rest of the strategy, consistent, relatively predictable execution that's going to position us for success over the long term. And clearly, the top priority for us is organic growth, and we think we have ample opportunity to deploy over time.

So when Victor says in his prepared remarks that we think the strategy is working. We see the results as evidence of that across a number of different areas. Each quarter that we see strong revenue performance, strong margin evolution, good client acquisition, rising client satisfaction, expense discipline that's driving operating leverage and well-controlled loan losses, particularly on a relative basis.

And I think most importantly, an upward sloping ROE. Our conviction in the earnings power and the fact that we have the right strategy just grows stronger and stronger. So we do expect to use the buyback.

The nice thing about a buyback is that we can go faster or we can go slower depending on how the environment evolves. But as that ROE continues to rise, we can return capital to shareholders through dividend increases and buybacks, and we expect to continue to do so.

Our next question comes from Ebrahim Poonawala, Bank of America.

So yes, I guess, first of all, Victor, congratulations. I think everyone hopes to do this. You are truly leading commerce in a better place than what you inherited, so in terms of consistency, stability. So credit to you and the rest of the team.

And you know what, Ebrahim, just before you start with your question and too many complements, the team that we have is an incredible team to take it forward as well. And that's what gives me great confidence.

No doubt, but it does require a strong leader. So you've done that and you're a humble person, but well done and all the best to you in retirement.

But I guess the question maybe following up as we think about where we go from here. And Rob, to your point, ROE drifting higher as they look towards the returns you all have delivered, combine that with the outlook on margin expansion going forward. And I know we kind of recalibrated the ROE target to about 15% plus over the last year.

But just talk to us in terms of the true ROE potential of the company. Do you think about sort of the rhythm you have in operating leverage where margin is headed? And at some point, there may be probably a little bit of capital flex too, is 15% plus more like 16% plus the way you see the world and if things are macro-wise getting better?

Ebrahim, it's Rob. I'll give it a shot here. I think -- and we did just as you pointed out, reduce the ROE target, but it was more about the capital load we were carrying. The conviction in our strategy and the fact that, that ROE is an upward sloping one, has never wavered. In fact, the ROE is even outperforming what we would have suggested at our 2022 Investor Day, considering the capital load that we're carrying, and we're earning through that extra capital that we have now within continuing to show the better ROE performance.

When we think of each of our businesses, there's a focus on driving that ROE higher and over the medium term, we expect that to continue. Now the markets are favorable and those can always change. These are issues that would affect the industry, not just us.

But from what we can see today, again, the conviction in the strategy is rising. We're not going to change our ROE target back to what it was. But it's safe to say that as we get to 15% and beyond, we expect it to continue to migrate higher based on the execution of our strategy. And we do want to target ongoing growth from there.

So I think what you're seeing in our numbers and our strategy is a balance between margin and volume growth, a balance between expense efficiencies and investing for the future and just balance in terms of our execution. That's going to continue and should lead to better things over time.

Our next question comes from Gabriel Dechaine, National Bank Financial.

Yes, Victor, congrats on the retirement. And if you want to meet up for a glass of rakia at some point, then your post-CEO phase, let me know.

For all those who don't know what a glass of rakia is, it's like a shot of plum brandy, they should only have after 6:00 p.m. and only one a day -- one a week, sorry.

Okay. Well, we can stick to that limit. The margin guidance, I know there's always some conservatism embedded in forward statements and all that. Last quarter was stable to up a bit and it sounds a little bit similar, but maybe a bit more optimistic. And this quarter, you did outperform your guidance. And I'm assuming several factors, deposit mix, competitive dynamics, all kind of went in the right direction. Like of those elements, what do you think is a sustainable trend? Because -- and as we look ahead to 2026, when you got a bunch of mortgages refinancing, and I also see the chart that has new mortgages coming on the balance sheet are at higher spreads than the ones leaving. Is this -- are we cautiously optimistic, maybe too much, though?

It's Rob. I'll get started, and I think I'm going to hand it off to Hratch to talk a little bit about what the business is doing because the Personal and Business Bank, it's our largest business, and it's the biggest driver of what's happening to our margin overall.

Part of the reason I gave stable to up in terms of the margin guidance in the past has been to capture things like what happened last quarter, which was the margin was down a basis point. And so when we give the guidance, it's not intended to be quarter-on-quarter linked quarter guidance.

But the more optimistic take on the margin from here is based on what we saw this quarter doesn't feel unsustainable or unusual to us. I've often talked about the margin in kind of three buckets. And the tractoring strategy, the balance sheet positioning part of the strategy is kind of doing what we expected it to do. The competitive dynamic is relatively stable. We had some pricing benefit this quarter from some promo offers that rolled off. But that business mix partly client choice, but also a very intentional business strategy that's happening largely in our Retail Bank.

And maybe that's a good place to hand it off to Hratch to talk about what he thinks going forward.

Thanks, Rob. Thank you for the question. Look, as Rob said, this is both the environment and a result of our strategy. And so from the environment perspective, certainly, rates still pricing into the balance sheet helps and margins, particularly on the deposit side are on the increase. But -- and I do think that's sustainable for the next little while.

More importantly, I think, is our strategy. And so, when you think about the strategy, it's been both individual product margins increasing as well as the business mix increasing to the positive. And those two things are also sustainable because we believe in our strategy, and we're continuing.

And just to give you a bit more flavor, when we talk about being a relationship-based bank, for us, particularly in the retail business, that means being a leader in the day-to-day banking products and being a leader in advice and investments. And you've seen that in the results. That's what we're doing.

We're focused on specific target client segments where we're trying to win, we are winning. We're focused on specific products, which are day-to-day banking products like checking, and you saw the launch today as part of our road map to continue evolving our products on that side. You've seen the launch of our Adapta product. We've got the great credit card lineup.

And so, you're seeing the momentum in the demand deposit products, the momentum in the credit card product, the momentum in the investment side and all of those things are helping margins. So in each of those areas, we're seeing good margins on the product level. But also those are our higher-margin products, and the mix is shifting more towards that because of our strategy.

The mortgage is an interesting example you bring up, right? And I think that in that case, it showcases all of these things. So you're right, mortgage margins coming in are higher than the outflows. And on pricing side, as you've seen in market, we are not leading with price. We are leading with advice. We're leading with the relationship, and that's allowing us to capture more margin on mortgages, and we're up about 20% on the portfolio margin year-over-year as a result of that.

We're also seeing mortgage book be more focused. So today, mortgages represent about 10% of our revenue. It used to be a lot higher than that. When you look at some of the stats, 93% of our clients have another product with us. Almost 80% of our clients that have mortgages with us have a checking account. And most of those clients were the primary bank for. All of those numbers are all-time highs, because we're focused on that relationship-based strategy rather than doing low-margin products individually on a transactional basis with clients. And we'll keep doing that. So I think the momentum on margin will continue going.

Our next question is from Doug Young, Desjardins Capital Markets.

I guess for Frank, it seems like Canadian personal unsecured credit trends are improving and it seems like that's been the case across a lot of the banks that have been reported. But can you touch on a little bit what you're seeing and expectations over the coming year? And obviously, the big risk right now, especially in Canada, depending USMCA renegotiations that are coming eventually. And can you talk a bit about how you kind of factor that risk into your expert credit judgment or your performing loan allowances or whatnot?

Doug, thanks for the question. I mean, unpacking it a little bit, as you see in the results, and if you heard us talking about, we are very pleased with our credit performance. We have a strong book, our Canadian Consumer portfolios, are very resilient.

And if you heard, that is part of our business strategy, that is part of very targeted investments, we did in risk management actions and risk management strategies along the way. Working with our clients when there is troubles, finding a good solution and working it out with them. But then again, as expected, those numbers continue to trend up. There is a little bit of potential seasonality you're seeing this quarter where it's coming down. And that's just as you highlighted, a reflection of the current macro environment. It's a reflection of unemployment, interest rates still being high and we factored that in into our guidance and into our expectations.

So I would say we are pleased with the impaired provisions. You asked a little bit about how we are factoring that into our performing provisions as well. The point I made in the prepared remarks and what we did is, we continue to keep a little bit of prudent weighting to our downside scenarios. You see our downside scenario getting a little worse this quarter. We have kept some weight on it. And that's why you see us continuing a little bit of a moderate build in our performing allowances. Nothing overly material, I would say, but just a continued reflection of all of those scenarios, including a renegotiation of USMCA in our outlook.

Next question is from Mario Mendonca, TD Securities.

Victor, let me add my congratulations and it's very impressive, what 10-year plus CEO.

Team effort. I just got to emphasize again, it's been a team effort, and it's been a privilege to be a captain of this wonderful team.

Good stuff. Frank, going to you. So I totally agree with Doug just offered that the unsecured Canadian credit looks a little better. That's true mostly across the industry might be maybe one modest exception there. But for your bank specifically, given that, let's call it, stabilization in unsecured consumer, is there any reason why you would move off of the mid-30s guidance, impaired PCLs going forward, like thinking about 2026 and going forward? Is there anything that's happening? And let's leave USMCA negotiations aside. Because we all know if that falls apart, then we've got a bigger issue. So leaving that aside, is there any reason why you changed that guidance?

Well, we can certainly give more specific guidance, in particular, for '26 next quarter. But you're right, at this point, I think we could expect this trend to continue, and we could expect to trend with that guidance or as we did this year, even at the lower end of that guidance.

All right. And then, is there any concern on the mortgage side, I see that 90 delinquencies up a little bit on a total bank basis, but GVA, GTA did look more stressful. Does that cause you any concern that the uninsured mortgages in Toronto and Vancouver are more -- are showing more stress than the rest of the book?

So we remain very comfortable with the exposure with the overall health of our clients and the portfolio. I mean, as you pointed out, delinquency rates moving up and in particular, in those markets, it's very well in line with what we expected. It's a reflection of higher unemployment, the high interest rates and the continued weakness in housing sales in those markets.

I would come back to very strong LTVs even in our impaired book. We have a healthy amount of provisions on the impaired side. And I'm not overly concerned that, that would translate into material losses.

All right. I'll be really quick on this one. So maybe to Rob. The move in this all-bank margin, no matter how you calculate it, has been huge since Q4 '22. I'm talking big moves in the all-bank margin. There's so many reasons why this focus on pricing over volume rates, mix, product margins. There's a ton of reasons why. But as we think about the next 12 months, would it be fair to suggest that this huge move we've seen over the last couple of years, that was special? And that we get a little bit more of a pedestrian improvement in the margin going forward?

Yes. Thanks, Mario. It's Rob. So I do -- I agree it's been quite the move in the margin, I think, for all the reasons that we've described. '26, I mean again, it's a bit early to give an overall outlook for '26, and it's always subject to what the forward curve does. But we continue to expect a tailwind in our Personal and Business Banking business, in particular, when it comes to the tractoring strategy.

I don't think we're changing the strategic focus that Hratch described earlier on the call. I think, it's fair to say that when I say increases from here, we're talking about gradual increases. So I don't think we'd be looking for the kind of increases we had this year. But I do think the direction of travel is still a positive one.

Next question is from Matthew Lee, Canaccord Genuity.

I'll echo my congratulations to everyone on team. There was a bit of a contrast in commercial loan growth between Canada and the U.S. And I've sort of been under the impression that the underlying trend in the U.S. economy was somewhat stronger than domestically. So maybe just contrast those two businesses and help us understand what's driving the outsized Canadian note book growth in commercial?

Yes. Thank you for the question. It's Susan speaking. I'll speak to the Canadian side of the business. So in the Canadian Commercial Banking, as you've noted, our loan to deposit growth was really strong for Q3, up 10% and 8%, respectively. I will note that over 43% of our growth on both sides of the balance sheet actually came from new clients to CIBC, and really, our strategy continues. We're really prioritizing relationship banking we always have. We have deep client relationships, and we're really focused on the connectivity between our Commercial Banking business as well as our Wealth Management business.

The deep industry specialization and the disciplined coverage efforts just continue to drive momentum in the business. I will say that the trade rhetoric has eased in the industry segments that we really prioritized. These are the segments that are actually covered by the USMCA. These segments actually make up most of our C&I loan book. So we do expect to continue to see momentum in that side of the business. So that's really how I'd position it and how I would see it on the Canadian side.

Perhaps, Shawn, if you'd like to comment on the U.S. side, please?

Thanks, Susan, and good morning, Matthew. So on the U.S. side, it's a bit more of a reflection of two components of the portfolio. So C&I growth versus CRE growth.

C&I growth has been strong. It's sort of 7% year-over-year. That's been pretty consistent throughout the year. In CRE, as you know, we've been executing a strategy to move away from certain elements and deemphasize elements of our institutional commercial real estate book, and that continued to play out this quarter. We had slightly higher payoff activity this quarter, much of it relates to that strategic decision. But the pipeline is solid.

We had some reduced utilization rate. I think that is an expression of some caution that clients have. We've seen deposit builds. Clients are building liquidity. There, I think there is some optimism growing, but they're still taking a bit of a wait-and-see approach as these macro factors play out. But as I said, the pipeline are solid. We do expect to meet our earlier guidance for the year for mid to single -- low to mid-single-digit loan growth for the year.

Our last question is from Darko Mihelic, RBC Capital Markets.

I have one question and one compliment. So I'll start with the compliment Victor, all the best, and I have a special slice of pizza to have later on. So hopefully, you can take me up on that offer.

I mean, thank you.

A question for you. I did hear in your prepared remarks that you were #2, let's say, in net sales in the quarter. I wanted to ask about -- because I haven't heard a bit of an update here on where you stand with Imperial Service. I know you were hiring advisers. Maybe you can provide a bit of an update on where you are with respect to that and where you are, let's say, also with how productive they are? Or are they just hitting stride? Or -- so maybe you can just give me an overall view on what we should expect from the Imperial Service and how it's helping presumably not just mutual fund sales, but generally, Wealth. I'd like to hear that if you have anything that you could offer.

I have to just make a few remarks here, Darko, because the Imperial Service is really a core driver of our Mass Affluent strategy. It's been a real focus of Hratch and the leadership team from front end to back end, which includes the technology, how we're applying artificial intelligence, how we're improving productivity and how we're focused on growing our adviser base.

And I might add just before I pass it on, Hratch, that we've had the highest Net Promoter Score within Imperial Service like in living memory. And that is a reflection of our team, our strategic focus, the technology investments, the strength of our Asset Management business, the strength of our financial planning approach.

And with that, Hratch, you should opine on some of those comments and your thoughts overall?

Thank you, Victor. I'm going to go back to -- Look, I'm extremely proud of what our entire team in PBB has been delivering, including the Imperial Service team, but it is a broader effort that's delivering the results that you see, and we do see that continuing, right? As I said earlier, we're building a relationship-focused bank, and we're building it for the future. And so for us, that entails being a leader in day-to-day banking for all Canadians being a leader for the Mass Affluence and Advice and in the Investment space. And simplifying everything to take the friction out for our clients, for our team as well as for our shareholders, creating efficiency. And that's what we've been executing.

And Imperial Service is a core pillar of that second part. And while it's been a big driver, I do want to call out here, when you look at the IFIC results that we've produced, the vast majority of that has come from the retail distribution. And again, I'm proud of the entire team, about 2/3 of it is Imperial. But there's also outside of Imperial, our entire frontline team has been contributing to that.

When I look at the Imperial Service platform, we are just getting started. We're making a lot of investments. So yes, we continue to grow the team and we are hiring, but we are also looking to, as I said, one of our priorities is take the friction out. We're investing in digitizing processes. We're investing and taking processes out of the front line where we can and making themselves service. We're investing in providing tools for our advisers to provide better advice to be more efficient, in preparing for meetings to be more efficient, after meetings to be more efficient with compliance requirements, and all of that is leveraging technologies, including generative AI and the CAI platform, as Victor mentioned in his remarks.

So all of that is playing dividends. We will continue to grow the team. We will continue to make them more productive. And when we look at our adviser to client ratio that is heading upwards, and we think we have continued to have opportunity to do that. And we have a lot of opportunity to move more clients into Imperial Service. When you look at our overall client base of over 13 million on the consumer side in Canada, we've barely started scratching the surface of consumers who are not in the Imperial Service offer who, based on our analytics, we know deserve to be in the Imperial Service offer.

And the math we have so far is, we have moved less than 10% of those clients into Imperial Service. When we get them to the right adviser, with the right tools, do a complete planning for them, we see increase in funds managed that is more than 50% in the first year of that relationship. And as I said, there's a lot more to do there. So as we create capacity and bring advisers on, we'll keep having more clients be able to access that offer and you're going to see the power of the franchise continue to grow.

There are no further questions registered at this time. I would now like to turn the meeting over to Harry.

Thank you, operator, and thank you all for your engagement today. Before we conclude the call, I would just like to thank Shawn Beber, who is sitting beside me here at CIBC SQUARE. Shawn will be retiring after 23 years at CIBC. And amongst his many contributions, Shawn has played a vital role, a pivotal role in our U.S. growth strategy, including our acquisition of the Private Bank. And later through his leadership of the U.S. region since 2022.

At the same time, I'm excited to welcome Christian Exshaw and Kevin Lee, to our group executive leadership team in the new fiscal year.

And then finally, on behalf of the Board and our entire bank, I want to thank Victor for his strategic vision, outstanding leadership and steady hand over his 11 years as our CEO. I am grateful for his guidance and partnership and for the support as we continue to undergo this leadership transition. Victor has transformed our bank and will leave behind a remarkable legacy that will continue to inspire us all. We are deeply grateful to you, Victor, and wish you all the best.

And with that, I'll now pass it back to Victor to close off his 44th and final earnings call at CIBC.

Thank you, Harry, for those very kind words. I haven't blushed this much in a conference call in my life. So I want to thank all of you for your kind comments. And I have a few more months left, like 61 days, before I retire as CEO and become a very proud and supportive alumnus of our bank.

I'd like to close out my last earnings call by saying thank you. I'd like to thank our 50,000 employees who collectively and passionately get out of bed every day and represent CIBC and our brand purpose with dedication to our clients each and every day.

I'd like to thank our leadership team whose commitment, execution and contributions have helped lead CIBC and drive the synchronized momentum we're experiencing today.

I'd like to thank the buy-side and sell-side investment community, those of you who are on the call, your questions and insights have helped sharpen us, have helped shape me and shape our perspective through the years.

I'd like to thank our engaged Board who have been a tremendous support and guide during my time as CEO. Particularly I'd like to thank our clients, without which we wouldn't have the franchise that we have. Their voice and how they feel about our bank is something that we measure each and every day. And I can tell you it's getting better. It will get better from here.

And I'd like to thank everyone for joining us and for your interest in CIBC. I look forward to remaining a shareholder, to being a client, to be an alumnus of our bank, and a friend of our bank, knowing that the best is still yet to come. Thank you, and have a good day.

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.