Good morning, and welcome to the CIBC Quarterly Financial Results Call. Please be advised that this call is being recorded. I would 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 Victor Dodig, our President and Chief Executive Officer; followed by Herach Panossian, our Chief Financial Officer; and Shawn Beber, our Chief Risk Officer. Also on the call today are a number of our group heads, including Mike Capatides, U.S. Commercial Banking and Wealth Management; Harry Culham, Capital Markets; Laura Dottori Attanasio, Canadian Personal and Business Banking and Jon Hountalas, Canadian Commercial Banking and Wealth Management. They are all available to take questions following the prepared remarks. During the Q&A to ensure we have enough time for everyone to participate and finish on time, we ask that you please limit your questions and requeue. As noted on Q2 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. With that, I'll now turn the meeting over to Victor.

Thank you, Geoff, and good morning, everyone. I'll start our call today with some comments on our first quarter results and the operating environment. I'll then turn the call over to Herach to review our financial performance in more detail. Earlier this morning, we announced another quarter of record results with adjusted earnings of CAD 1.9 billion or $4.08 per share, which is up 14% from last year. Our performance was supported by top line growth of 11%, which drove positive operating leverage. Our first quarter results also underscore the ongoing strength of our highly connected franchise, an increasingly supportive economic environment and steady execution against our strategic priorities. We're earning business from new clients. We're deepening relationships with existing ones, and we're continuing to build our CIBC franchise with the long term in mind. We also reported an adjusted ROE of 17.6% and a CET1 ratio of 12.2%, the latter being 170 basis points above the regulatory minimum. Credit quality remains strong as the economy improved and our clients maintain high levels of liquidity. This morning, we also announced the proposed 2-for-1 stock split that will be voted at our annual meeting in April. Our stock price is appreciated significantly, thanks to our collective focus on living our purpose and driving consistent financial results. That makes now a good time to announce a split, which would make our shares more accessible to many retail investors. Turning to our business results. In our Canadian consumer franchise, we delivered market share gains in deposits and loans that will be further advanced when we officially become the exclusive provider of Costco, Mastercard in Canada. This serves to grow and diversify our credit card portfolio, and we're looking forward to welcoming many new clients to our bank. We also continue to invest in…

Thank you, Victor, and good morning all. Starting on Slide 7. We are pleased to have delivered another quarter of strong growth and profitability while maintaining the resilience of our balance sheet. This performance was enabled by the investments we've made in our client-focused diversified business and purpose-oriented team. Diluted earnings per share was $4.03 for the quarter, excluding the amortization of acquisition-related intangibles and expenses associated with the acquisition of the Costco credit card portfolio, adjusted EPS was $4.08 while adjusted ROE came in at 17.6%. Strong growth in revenues and pre-provision pretax earnings underpin this quarter's results and credit quality remains strong as Sean will cover later in our presentation. The balance of my presentation will refer to adjusted results, which exclude items of note, starting with Slide 8. Adjusted net income of $1.9 billion for the quarter was up 15% from the prior year, while pre-provision pretax earnings of $2.5 billion were up 11%. Revenue was $5.5 billion, up 11% year-over-year, driven by broad-based volume growth, resilient margins and robust fee income across our bank, including strong performance in our trading and wealth management businesses. Expenses were up 1% sequentially and 10% from the prior year, largely due to performance-based compensation, continued increase in investments to fuel sustainable growth, the impact of inflation and increasing activity, including business development across our business. Slide 9 highlights the drivers of net interest income. Excluding trading, NII was up 11% from last year due to robust growth in client business on both sides of the balance sheet. We anticipate continued NII growth supported by volume and strong margins assuming the rising interest rate expectations embedded in the current forward curve are realized. Total bank NIM was up 2 basis points sequentially. Underlying this, Canadian Personal and Commercial Banking NIM was…

Thank you, Hratch, and good morning. In our first fiscal quarter of 2022, our businesses performed well across our bank while navigating more volatile markets and changing conditions. Credit quality remains strong. As we anticipated, we're starting to see some normalization in our retail credit portfolios, though our clients continue to exhibit higher savings and payment activity than prior to the onset of the pandemic. At the same time, this quarter saw higher case counts and hospitalizations as a result of the Omicron variant, the return in some areas of more restricted public health measures and the continuation of supply chain disruptions. Together with geopolitical developments, these conditions have contributed to higher levels of inflation and market volatility, and we are monitoring these developments closely. And while uncertainty persists, particularly given events over the last 24 hours, our allowance levels are strong and provide coverage for a variety of outcomes. Turning to Slide 21. In Q1, the provision for credit losses was $75 million compared with a provision of $78 million last quarter. Provision on impaired loans was up modestly at $126 million in Q1. Impaired provisions were up in Canadian Personal and Business Banking due to higher write-offs and higher delinquencies and in U.S. Commercial and Wealth due to higher impairments. In Canadian Commercial and Wealth and in capital markets, impaired provisions were lower as a result of a few reversals. In our performing portfolio, we had a provision reversal of $51 million this quarter, primarily driven by a favorable change in our forward-looking indicators, partially offset by credit migration, which we have been expecting to see increase in our retail portfolio as clients begin to revert to pre-pandemic spend patterns. Overall, credit performed well this quarter, reflecting the strength of our portfolio and underwriting discipline. Slide 22 details…

. And the first question is from John Aiken from Barclays.

I wanted to dive in a little bit in terms of the domestic commercial loan growth that we saw 5% growth sequentially and as noted 19% year-over-year. Just wondering if we can get a little more color in terms of what type of activities are driving this? What are you seeing the business is doing? What's the sense of the pipeline through the remainder of the year, particularly with the volatility that we're seeing in the economy? And what type of competitive response are you seeing in terms of the market share growth that presumably you're gaining?

Thank you for the question, John. So for the quarter, our loan growth and for the quarter and for the year, diversified by geography, diversified by asset class. In quarter 1, specifically, 25% of the growth came from our real estate business. The rest came from diversified. Notwithstanding all the challenges you hear, demand for clients' products is high. They can push through price increases supply chain challenges aren't really impacting when inventory comes in late, clients are able to sell it. So when we talk to clients, they're talking about growth, they're talking about investment, and it's reflected in our loan growth. This quarter, about 40% of the growth came from new clients, 60% came from increases, some of the M&A, some of it natural growth. Interestingly, the pipeline going forward is strong. It's stronger than I've seen it since '19. So it continues to be good. You see our credit quality very strong. So overall, we're feeling pretty confident.

And the competitive environment, what -- are you seeing any pressures on pricing or people moving down the credit co?

Nothing more than -- it's an aggressive market. Pricing, we don't really see, there's deals from time to time where people are stretching. And when people stretch too far, we're not there. We know our clients well if we stretch it for our clients. So overall, nothing I've seen over the last year or so that's any different from history. It's a competitive market, and we're winning.

The next question is from Ebrahim Poonawala from Bank of America.

I guess just Hratch, going back to Slide 12 around expense growth. to us. I think there was a lot of concern last quarter Italy the stock reacted negatively to your guidance for negative operating leverage in the first half. Year-over-year, the efficiency ratio was relatively flat -- when we think about the 7% or the 10% year-over-year expense growth, is this the high water mark, both in terms of dollar and growth rate? And should we expect to trend lower through the course of the year? And what does that imply when we think about operating leverage, either quarterly basis of full year? Any color there would be helpful.

Ebrahim, thank you for the question. It's a good question, and we think about this topic a lot because we believe managing our resources and deploying capital prudently for our shareholders is 1 of the key things we do here. So let me start with reminding everybody how we think about our investments in managing our cost base. And as I said, we are very disciplined and deliberate in terms of how we allocate capital on behalf of our shareholders. And we think in this environment where the banking landscape continues to evolve and uncertainty exists, it's important to allocate capital to invest to transform our bank and to create sustainable competitive advantages and that's what we've been doing. And alongside our balance sheet, we do see the expenses coming through our income statement is 1 of the key resources we have to invest, and we manage it that way. Our overall objective, as we said, is always to increase investments to generate growth while reducing operational expenses through efficiency and discipline and through that overall generate top line -- strong top line performance, and generate positive operating leverage over time. And we've done that successfully. If you look at the pandemic years, we've invested heavily in our business and our team and our clients. We're seeing great results as a part of that. We're seeing the market share gains and momentum across all of our businesses. We've seen the accelerated top line growth. You're seeing that this quarter, double digits and same with last quarter. And we've achieved -- if you look at that 2-year period, we've achieved slightly positive operating leverage despite the increased investment and despite some of the disruptions to revenues from the pandemic. And so coming into this year, we've guided to do the same…

And just clarifications on those, Hratch. One, when you talk about high single digits on back of a stronger revenue backdrop, are you assuming some benefit from rate hikes in Canada and the U.S. in that statement? And is some component of that $71 million on that slide, does that roll off or does that become part of the run rate going forward?

Yes. Thanks for the follow-up, Ebrahim. I think when you think about this on the strategic investment side, those are investments that we are making that are going to continue increasing. So we see for the foreseeable future here, we're going to have that level of investment continue and be sort of more elevated. Some of that turns into ongoing revenues for us. And then some of it is going to be ongoing DOE, but we think that investment level is going to continue.

The next question is Meny Grauman from Scotiabank.

Harry, in your segment, we're seeing the average loan balances on a sequential basis up about 10%. And I'm just wondering what's driving that? Is it utilization or are there other factors pushing those balances as well?

Thank you for the question. As you know, within Capital Markets, we provide lending solutions really to a well-diversified client franchise. This is truly a client-driven business. So that would include loans to our personal clients in direct banking, that's simply in Direct Investing Investors Edge. That would also include corporate clients, particularly as we grow in selected industry verticals in the U.S. and really continue to maintain our leadership position in areas such as renewables and energy transition. And then, of course, institutional clients, which include insurance companies, asset managers, pension plans and private capital on both sides of the border. The majority of that loan growth is from corporate and institutional loan growth, particularly in the U.S. where we see about 70% of that growth. We have been strategically and deliberately growing our loans in the U.S., including institutional clients, where we're providing asset-based financing that have very strong returns and really are very well collateralized. So to answer your question, it's very well diversified. There is some increase in utilization as well, but it really is driven by the client demand for this resource, in particular as we deepen relationships and build our client franchise.

And in terms of that personal side of the business, what kind of growth are you seeing there?

We're seeing a single-digit growth in the Simply platform. We have seen some growth as well in the Investor's Edge portion as we strive to grow market share. So it's very well diversified across the platform, but the majority of the growth is the corporate institutional loan growth.

And so just as a follow-up, I guess what you're saying is this is really -- what we're seeing is not so much -- so we're not seeing accounts getting more nervous from a risk perspective. This is actually sort of positive growth rather than people drawing on their lines because they're getting more risk averse. Is that correct?

That's absolutely correct. We've seen very robust client opportunities over the past few quarters. You've seen our strong loan growth numbers. We're really happy with the results and comfortable with the risk as we grow that franchise.

The next question is from Doug Young from Desjardin Capital Markets.

I want to go back to just the comment you made on your partnership, and I probably get this wrong, but with TYL -TYL, that's the cloud-based platform for businesses. And just I'm wondering whether you can talk about is this anticipation of the launch of open banking in Canada? Because I do say that because Australia and U.K. is where 2 areas where open banking does exist and the SME seems like it's a tremendous opportunity for open banking. So hopefully, just to get a little more detail on that.

Sure, Doug. Let me first address open banking, and it was a question that was asked in the last quarterly webcast, and it's 1 I want to reaffirm that we're ready for open banking. We welcome open banking, we encourage our government policymakers to think about both the offense and the defense in open banking. When it comes to our bank, specifically, we're well set up for it both through our personal and business banking franchise as well as through our direct financial services franchise. We've got strategies that cover the map and allow us to compete very effectively. Today, we specific -- well, this week, we specifically announced 2 fintech-related investments that relates specifically to our business banking franchise in our personal bank. One is the Encino platform that will make lending easier. The TIL platform, it's still not TL. I learn that as well on the way. It has been very successfully implemented by National Australia Bank and by NatWest Bank. We've made an equity investment in the underlying company called Pollinate that runs TIL. We think it's a real opportunity for us to serve small and medium-sized business clients Laura and her team have been working with their technology team at the forefront of this. I'm just going to hand it off to her to talk about why TIL is an important aspect of competing as the world changes.

Sure. Thanks, Victor, and thanks, Doug, for the question. We're really excited with this partnership. We are looking forward to be able to offer our business clients more services. So this is really about having more of an integrated ecosystem for payment processing. So we think this gives us a great advantage where we can combine payment processing and small business banking services under 1 service provider. And when we think of the work we'll be doing with nCino, that should actually help us as we digitize, I'd say, to grow faster and really offer better services and experiences to our client base.

Appreciate the color. And then just 1 for Hratch. You may have disclosed this in here, and if you have, I apologize. But you talked about the impact of PPP forgiveness on NIMs, have you quantified what that impact was on U.S. NIMs and unconsolidated NIMs and how you anticipate that to kind of run off over the next year?

Yes. Thanks. Certainly happy to take that. It's embedded in that other, when you look at our NII slide and the waterfall chart in the bottom right corner there, you'll see there is the other buckets within that other bucket is the impact of our PPP prepayment activity and the PPP income this quarter. And what I can tell you breaking that out is this quarter, it was actually down a bit. We started seeing that moderating. So on a sequential basis, it was it was a negative to NIM, but it was offset by other general prepayments and repayment activity happening, we sent the overall to positive in that other bucket. Going forward, I'd say there's probably a few basis points, single-digit, low single-digit basis points left in terms of help to the NIM from PPP. And we do anticipate it to go away here in the next quarter or so, it's a little bit unpredictable. But that will go away. That's the impact to the U.S. NIM, and it really isn't a material amount of NII to total bank. And so we don't anticipate it impacting total bank NIM.

The next question is from Nigel D'Souza from Veritas Investments.

I had a question for Shawn. Based on my calculations, it looks like you still have a sizable amount of allowances on performing loans remaining from what you built during the pandemic? And could you give us some color on whether there's a likelihood that you may not be able to fully release those excess allowances given the headwinds that we're seeing politically, economically, on inflation and interest rates. Should we start assuming that a good portion of those allowances may not be released?

Thanks for the question, Nigel. So we did build provisions, as you noted, throughout 2020 and then have been on a trend for the last several quarters in terms of releases. There are a couple of different moving parts in terms of how that performing provision behaves. And I should say, from a coverage perspective, we peaked at 89 basis points. We're down at 61 basis points, and we started immediately prior to the pandemic at 51 basis points. So as that coverage ratio has come down, it's been a combination of releases as a result of the improving economic backdrop and the economic outlook continuing to improve, but also as a result of portfolio growth. And so you've seen we've had strong portfolio growth over the course of the last couple of years. And so as we add provisions, performing provisions in relation to that portfolio growth that starts to, if you will, consume some of that performing PCL build. From here, I mean, we've certainly got uncertainty in the environment. We have talked in prior quarters about the fact that the outlook if they continue to improve, we would expect to see those releases. We'll assess the uncertainties today as we go quarter -- as we move forward into subsequent quarters. But that trend has been 1 that we've been witnessing over the course of the last several quarters in terms of the releases as well as the consumption through organic growth in the portfolio. So we assess that every quarter. And as we update our FOIs, that will help guide in terms of what ultimately happens with those provisions.

Okay. Great. And if I could kind of just drill down a little bit further into that. When I look at your FLIs on Slide 35, and your indicator on the household debt service ratio, could you give us a sense of your assumptions for rate hikes that are baked into your base case forecast? And does the rate hike assumption differ for your upside and downside case?

Yes. So that ratio we've built in -- our assumption was for 100 basis points of interest rate increases and inflation based on our economic -- our economic team's outlook, which was sort of in the 3 percentage range. And so that's built into those forecasts. And then from there, we've moved it up and down across the upside and downside cases. But from a base case perspective, 100 basis points of interest rate is part of that outlook for the next year.

Okay. So it sounds like you're beefing up the economic team outlook rather than the bond market pricing, at least 6 rate hikes. But that's useful color. I appreciate it.

Thank you.

The next question is from Sohrab Movahedi of BMO Capital Markets.

I just wanted to quickly go to Laura. Laura, the segment the Canadian personal and small business segment improvement in efficiency ratio quarter-over-quarter versus last year and probably the lowest since, I don't know, Q1 '20 back then, you had much higher net interest margins. So can you just talk a little bit about how much of this is because of management of expenses as opposed to efficiency pickups from prior investments? And where do you think this may kind of trend understanding that it's hard to talk about a particular segment. But I'm just trying to understand how you're thinking about this.

So thanks for the question. Look, as Hratch mentioned earlier when Ebrahim asked his question, so this is a bit of a derivative of that. A lot of what we're seeing is the investments and the hard work that the whole team at CIBC has put in, which is allowing us to deliver, I'd say, some real quality volume growth. So we're seeing great top line growth. We've put in a lot of work to ensure that, that will be consistent and sustainable. As Hratch mentioned, we're going to continue to do that. That said, we do expect to continue to spend and invest in our strategic initiatives. So I would expect we're going to see volatility quarter-to-quarter as we do that. But again, as Hratch said, we're going to be prudent in terms of what we do. We're pacing our investments. We are continually looking at ways to simplify how we do things in order to deliver more bottom line to our stakeholders. So hopefully, that answers your question.

It does. But can I just drill down a little bit, for example, FTE count is up versus last year, but your efficiencies have improved. So -- is it just more of a variable comp-based FTE? Do you expect the FTE trends to continue? I'm just trying to kind of get a feel for how -- what sort of control you have over your expenses? And how much of this is because of the better revenue environment.

No, I think we have really good control over our expenses. A lot of what you're seeing there are increases in productivity. So we've talked about in previous calls, some of the great tools we've put in place for our team members, whether that's ECR, our goal planner, et cetera. So we have a lot of tools that are allowing our team members to be much more productive.

And stuff like TIL and nCino, these will be additive to the productivity?

Absolutely. We need to -- I mean we need to start by implementing them, rolling them out. They are as good for us from a defensive perspective in terms of keeping our existing client base happy and bringing them the tools and experiences they need. And it's also about growth for us, and it will allow our team members to be more productive once we have those rolled out as well.

Next question is from Gabriel Dechaine from National Bank Financial.

Question on your rate sensitivity. I'm not sure if you've mentioned this in the past, but when you give that, are you assuming -- can you give me what assumptions you've made about the surge deposits, we call surge deposits. Are those not included or excluded from your guidance? And then as far as the pace of rate hike, what do you assume as far as passing the deposit betas are you assuming 50% to 75% of volume I mean, we probably won't give me a specific number, but just to kind of get a sense of where that is?

Yes, thanks Happy for the question, Gabriel. And so I think to start, when you look at the disclosure, there are a lot of assumptions in that, as you mentioned, with respect to the deposits that are more transient in nature, those are included in this number when we provide that. Now we have treated those as more transient. And so we've invested and hedged them accordingly, and we do anticipate some of that to moderate. And so we've managed that appropriately, and we feel confident about the NII impact from those deposits and how that will progress from here. But it is included in that sensitivity. In terms of the assumptions we make, and this goes a bit to Ebrahim's follow-up question earlier, what do we assume? Generally, as we've said before, when we talk about outlook and it was all over my script, we base it on the forward curve. So when we talk about our outlook in terms of top line, when I talk about operating leverage expectations for this year, although that assumes the increases that are in the forward curve today. We -- if you look at since the end of January and end of the quarter when we first looked at this, I think despite everything that happened yesterday, there was a bit of disruption we're not far off where we were before yesterday. And in fact, rates, if I just look at 3- to 5-year in Canada, you are in the teens basis points even ahead on the swap curve where you were at the end of January. And so you've seen material run up over 100 basis points and based on our sensitivity, you can do the math on how much you would expect that to impact '22 earnings. So that is…

Well, that's a lot to chew on. My next question is on the commercial growth, 18% in Canada. Jon, can you talk to me about the impact of lending to private equity sponsors, like the businesses they're acquiring and do you do any co-investment alongside these partners? Because I mean, I've heard about those types of borrowers being a pretty important influence on commercial loan growth from all the banks. So maybe throw some numbers around there.

So thank you for the question. So we don't generally co-invest. So let's start with that. In terms of our growth this quarter, I'd say less -- it's not a big part of our business, right? We have an $80 billion loan book. This would be a very small part of that. It probably contributed a few points of growth but nothing material, everybody's focused on it is leverage on a bit higher. In some cases, yes, loan funds have come in. They've made the market more aggressive. We focus on a few sponsors. We're close to them. We get a big part of their business and loan book is in good shape. So they're active for sure. There's lots of private capital, as you know. So pick your sponsors, go deep with them, follow your clients, good things happen.

So it's not like half of that growth or anything like that, right?

No. No, no, not even close.

And what's the sign-up bonus going to be on the Costco card or . No, just kidding. I'll wait for that one.

I hope you have a card, Gabriel, are you?

of the Costco.

The next question is from Darko Mihelic from RBC Capital Markets.

I have a question on your capital markets business. And what I'm interested in understanding is how risk-weighted assets, so your market risk didn't move quarter-over-quarter as a pretty big jump in trading securities and those are average balances. So perhaps maybe that stuff now dive at the end of the quarter. But can you help me understand why risk-weighted assets, especially market risk didn't move quarter-over-quarter. It's quite contrary to what we saw yesterday at RBC, where they had a relatively big change in market risk, and they suggested that there was inventory holds and so on. So I'm curious as to maybe how you're managing also curious as to how that works going forward in this volatile environment. So maybe you can just talk about the movement in market risk for me, please?

So clearly, trading securities have increased quarter-over-quarter and year-over-year, reasonably high percentages of 16% and 23%, really due to market appreciation. We've seen growth in our U.S. platform, including our prime services business and our equity financing businesses, really supporting our clients and providing hedging solutions. So we're seeing market appreciation. We're seeing in those businesses, very well diversified by client, by geography and also by product. Really, it comes down to providing hedging solutions. The trading revenues were obviously significantly higher, partially on the back of that. And that is commensurate with the growth of our client franchise. There were some other RWA increases. Maybe I'll pass it over to Shawn to comment on that.

Yes, Darko. So there was increases in market risk RWA as a result of VAR and SFR, but those were offset in part by changes in our incremental risk charges as a function of updates to models. So that was a benefit this quarter.

Okay. And so basically, the read-through then is your actual balances are up. It didn't come down. Look, spot balances didn't come down towards the very end of the quarter. And so maybe in this increased volatility, Harry, can you just talk about how trading is holding up? And if these are securities that are there really for hedging purposes, I shouldn't be concerned about trading losses. Is that -- is that a fair statement?

That's a fair statement. As you know, Darko, it is a very well diversified business. It's -- we devote our VAR -- we devote all of our resources to our clients. It's purely a client-driven franchise. We're building that franchise. And so we're seeing more opportunity to deploy resources to our core clients, and it's working well. And we're seeing growth across the platform. across geographies, across industries, into the new economy, and we're very pleased with those results. We're very, very comfortable with the risk. We've seen more disruption in the markets, and we continue to handle that very well.

The next question is from Mario Mandanca from TD Securities.

Can you just touch on the second part of Darko's question let me ask specifically if the momentum is continuing into subsequent quarters on the trading side?

So I guess I'll just reiterate again, well diversified business. And as Victor said earlier, differentiated capital markets platform, -- we're really focused on maintaining that leadership position in our domestic market. We're growing our U.S. platform, specifically in the new economy around renewables, energy transition, private capital and the product capabilities, and I mentioned prime services, as an example, we're deepening relationships with our U.S. corporate clients and commercial clients with our partners at Bank USA under Mike Hapatitis. We've seen significant growth as a result of that. And at the same time, we're enhancing our connectivity across our commercial and wealth and retail client base. So it's very well diversified to answer your question. We gave you an outlook a quarter ago, where we said we would -- we're confident we could drive $600 million plus in pretax -- pre-provision pretax earnings, and we're confident that we can continue to do that going forward. with a little help from market tailwinds, perhaps as we've seen this quarter.

Let me ask in a different way then. Was there anything specific this quarter on the trading side any sort of special circumstance that would have driven such high trading revenue that you -- maybe we haven't seen in previous quarters? Anything special this quarter? Because it's up about $200 million, more than $200 million from Q4 to Q1?

Yes, quarter 4 tends to be a slightly weaker quarter in the industry. Quarter 1 on quarter 1, it's nice growth, commensurate with the growth of the franchise. I would say that I go back to my earlier statement, this is a well-diversified business. So across the platform. And in particular, we've just seen very strong client franchise interest and growth. And so we're working with our clients more closely than ever. I think we still with our clients and work with them very closely in difficult times. And as we move through this pandemic, we are seeing our franchise grow very nicely. So the answer is no. Nothing stood out.

Okay. Let me go to Victor, if I could. So this quarter, loan growth across the franchise looks exceptional. And when I see that, my mind sort of races to a couple of things, either you're going to give it back on the margin and we're not seeing that. Long-term losses are going to -- PCLs are just going to elevate because you just -- maybe you've changed your lending practices a little bit or the third option, which is I suspect what you're going to highlight is that the bank has improved. It's a better bank now than it was 2 years ago or whatever that is. So assuming that, that's your position, and I suspect that is what is actually different today from what the bank looked like a year or 2 years ago that's allowing for this market share on a sustainable basis?

Mario, thank you for your question. I think you know, as you've been following our narrative and our evolution is the bank has substantially changed over a number of years. And the primary focus has been the culture of the bank, the collaborative nature of how we serve our clients and a day in and day out focus on making sure that we can meet our clients' needs and go deeply in meeting those needs, existing clients and new clients. If you look back over the last 7 years, and I look at some proof points is what's happening. Well, our client experience scores have improved more than anybody else in the industry and dramatically, and we still aren't happy with where we are. That is a reflection of how clients feel about how we're serving them. That's true in every single business across the bank. What you're seeing is a bank that's client focused, that's bringing the entire resources of our bank to serve our clients, that's managing well within our risk appetite and that is investing in the underlying technologies to modernize our bank as well. So clients can self-serve on stuff that they can do day in and day out on their own, but meet with our relationship managers where we're also investing across all of our businesses in private banking, in capital markets, commercial banking and personal banking to manage those relationships. And that is the bank that we are today. That's the bank that we will continue to be, and you should expect to see us continue to deliver good results to our shareholders, really good client experience results -- and quite candidly, really good employee Net Promoter Scores, which is also something that I take great pride in. People feel good about our bank, people feel good about our client-centric strategy, and that should translate to good financial results.

The next question is from Scott Chan from Canaccord Genuity.

Maybe going back to Jon or Shawn, on the Canadian commercial segment. You kind of talked about the improved commercial outlook. But just on the credit side, I noticed last year, I think the impaired loans was just 1 bp and 9 bp this quarter. So Jonathan, is there like metrics like watch list that you could maybe talk about in terms of how you envision any normalization in impaired loans within the segment this year or next?

Thank you, Scott. So again, fiscal '21 was remarkable from a loan loss perspective. And it's a lumpy business, right? So '21 was excellent. The start of '22 has been very good. The watch list looks good. We watch, we look at things by risk rating, size of credit, the numbers are down. There's nothing we see that causes us any great concern. I'll pass it over to Shawn and Casey he has anything to add. But so far, so good. and confidence the underlying confidence of our clients is good. And you see very few clients today going backwards. Revenues are up, margins are good, people are doing well. I know it's uncertain, but so far, it's good. Shawn?

I'd just add the outlook is based more on a view towards some level of normalization over the course of time. How quickly that normalization comes is a function of what the economic backdrop is going to look like. There's been -- there's additional uncertainty at this stage than there would have been when we put it in our FLI, but we'll see what that looks like next quarter. But to John's point, we feel very good about where the portfolio sits today and we'll continue to monitor for that. And as Jon mentioned, it's lumpy. So we're always watching for those types of stresses to develop, but no thematics at this stage.

And just lastly, on you. You kind of cited in the slide, Slide 5, you launched the new CIBC family office building up a team. Perhaps you can maybe talk about the buildup and potential opportunity within that segment and maybe how intertwines evolve in your commercial clientele?

Again, thank you, Scott. It's a big deal for us, right? We put the Commercial and Wealth Business together because we knew what was coming on the private capital side, we know kind of clients would be exiting, there'd be lots of money to be made. Entrepreneurs will make money. We've helped them make the money via the commercial bank. They trust us to manage the wealth. So family office was just a natural evolution of our value proposition. And we're -- again, it's going well. We've had more sales. I tell people the story. In the last 2 or 3 years have been more the company sold for greater than $250 million than I saw in my prior 10 years in banking. So entrepreneurs are getting wealthy. We structure to serve them, and the family office is a piece of that. And the referrals family office or not between Commercial and Wealth are up big.

And the final question will be from Mike Rizvanovic from Stifel.

A question for Sean. I just wanted to quickly ask about the trends in insolvencies. And maybe this is more so on the consumer side. So are there any impediments right now in this environment with coded and maybe the courts being backed up? Is there any sort of backlog building in terms of when things are maybe running a bit more smoothly that you get a rapid increase in insolvency. So I guess what I'm asking is, are there any hindrance in your ability to petition someone into insolvency at this point in time?

I think that was more an issue earlier on in the pandemic. We have started to see, and we're not seeing it in our portfolio just yet, but we have started to see an uptick in, for instance, business bankruptcies. As I say, we're not seeing it in our portfolio as yet. We're not anticipating a significant wave of that at this stage and believe we've got an appropriate level of provision coverage for the stress that we anticipate over time in the portfolio just from a normalization perspective as opposed to any deterioration.

Okay. And then just 1 quick numbers question for Hratch. Just looking at the gains on financial instruments, 2.59 this quarter, somewhat elevated versus the recent run rate, but a very lumpy number. I'm wondering, can you comment on what drives this? And I'm guessing most of this shows up in the corporate segment. Is this something that you just purposefully can do and sort of pull the trigger on when it's opportunistic or is it more so driven by market conditions?

Thanks for the question, Mike. We don't manage any of our portfolios on an opportunistic basis. In the corporate and other segment, we've got treasury portfolios of HQLA that portfolio grows as the HQLA requirements of the bank grows as the balance sheet grows. We manage those for stable NII and there's time to time opportunities to rebalance folios in order to ops returns and yields, and that's what we do. But it's not a lever we pull opportunistically. There can be noise. It can be market driven, it could be rebalancing driven, but certainly not something we do

This concludes the question-and-answer session. We'll turn the meeting back over to Victor.

All right. Thank you, operator, and all of you for asking your questions. I know they're very technical in nature, and I hope we answered all of them. I want to take this opportunity to thank our incredible CIBC team, who continues to operate with a client-first mentality, which is a critical component to the success of our bank. Our strong performance this quarter highlights the momentum across all of our businesses as we continue to build on our 2021 accomplishments and execute against our very clear strategic priorities. This, combined with a resilient balance sheet, is enabling us to invest in client-focused, profitable growth initiatives and continue to position CIBC for the future. Over the past few years, we have invested significant resources to enhance our banking capabilities, to grow market share and to streamline our cost base. I think you can see all of this in our results. We've seen evidence of our strategy success in our past investments as we deliver profitable growth and volume growth. We're a very different bank today with a collaborative culture that's on the ascent. And we're going to stay focused on a client-first strategy with an investment road map that drives profitable growth over the short, over the medium and over the long term. I want to thank you for your interest in CIBC, and we look forward to speaking with you on our next call. Take care.

Thank you. The conference has now ended. Please disconnect your lines at this time, and thank you for your participation.