CIBC(US:CM)2022-12-01 16:38Financial Data and Key Metrics Changes - Adjusted fiscal 2022 full year revenue was $21.8 billion, up 9%, and pre-provision pre-tax earnings were $9.4 billion, up 7% from the previous year [8] - Adjusted net earnings were $6.6 billion or $7.05 per share, down 2% from the prior year, primarily due to more normal credit provisions [8][19] - Operating leverage was negative in fiscal 2022, with structural expense growth in the mid single-digits and total expense growth of 11% year-over-year [9][33] - CET1 ratio remained strong at 11.7%, and return on equity for the year was 14.7% [9][33] Business Line Data and Key Metrics Changes - Canadian Personal & Business Banking saw net client growth of over 350,000, with deposits and assets growing by 9% and 12% respectively [11][12] - Canadian Commercial Banking and Wealth Management reported loan and deposit growth of 20% and 12% respectively, with a record year of net inflows in Private Wealth, up 27% [13][14] - U.S. Commercial Banking and Wealth Management experienced loan growth of 15%, with strong client growth of 6% in wealth and private banking funds [15] - Capital Markets revenue grew by 17%, driven by strong performance across all lines of business [31] Market Data and Key Metrics Changes - The Canadian Personal & Business Banking segment added over 350,000 net new clients, with significant growth in the affluent segment [11] - The U.S. segment's net income was down 42% due to higher credit provisions, but pre-provision pre-tax earnings increased by 3% [30] - Non-interest income was $2.2 billion, up 6% from the prior year, driven by trading income [24] Company Strategy and Development Direction - The company is focused on high growth, high touch segments and investing in technology to enhance client experience [10] - Strategic investments are being made in Innovation Banking, fintech capabilities, and renewable energy platforms [10] - The company aims to moderate expense growth in 2023 to the mid single-digit range while continuing to grow its client franchise [17][34] Management's Comments on Operating Environment and Future Outlook - The management anticipates slower global economic growth in 2023 due to central banks' monetary policy tightening [17] - Confidence in navigating challenging circumstances is emphasized, with a focus on execution and client growth [17] - The company expects to generate continued but moderating revenue growth through share gains and improving operating leverage [34] Other Important Information - The company announced a $0.02 dividend increase to common shareholders while maintaining a payout ratio between 40% and 50% [9] - The company has set 2030 interim targets to reduce carbon intensity in its oil and gas and power generation portfolios [10] Q&A Session Summary Question: Revenue growth expectations for 2023 - Management indicated uncertainty in the revenue environment but remains confident in delivering high single-digit growth over the medium term [48][49] Question: Update on mortgage and commercial loan growth in 2023 - Mortgage growth is expected to be low single-digit, while commercial loan growth is anticipated to return to historical levels of high single-digit growth [54][56] Question: Impact of mortgage growth on margins - Management acknowledged that rapid mortgage growth in the past has led to current margin pressures, but efforts are being made to protect margins [60][61] Question: Performing loan reserve increase - The increase in performing loan reserves is primarily driven by forward-looking indicators affecting personal lending and credit card books in Canada [66][68]