Good morning, and welcome to the CIBC Quarterly Financial Results 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 Victor Dodig, our President and Chief Executive Officer; followed by Rob Sedran, our Chief Financial Officer; and Frank Goose, our Chief Risk Officer. Also on the call today are a number of our group heads, including Shawn Beber from the U.S. region; Harry Culham from Capital Markets, Global Asset Management and Enterprise strategy; Hratch Panossian from Personal and Business Banking, Canada; and Susan Rimmer, Commercial Banking and Wealth Management. They are all available to take questions following the prepared remarks. Given we have a hard stop at 8:30, please limit your questions to one during the Q&A to allow everyone to participate. 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 may 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.

Thank you, Geoff, and good morning, everyone. I'll start by highlighting three key messages I want to leave with you today. Number one, we're delivering strong, consistent financial performance. These results are a reflection of the CIBC's team's focus on proactively managing our bank and consistently executing our strategy to serve our clients. Number two, we have the right strategy to further our growth momentum into fiscal 2025 and beyond. Our client-focused strategy leverages the competitive advantages we've built over time and it emphasizes high growth and profitable client segments. This is a long-term journey, and we're on the right track. And number three, we enter fiscal 2025 in a position of strength, with a robust capital position, strong credit quality and a dedicated CIBC team that is the driving force behind our growth. Now turning to our adjusted results for fiscal 2024. This morning, we reported net earnings of $7.3 billion, showcasing the strength and resiliency of our diversified platform. Earnings per share was $7.40, up 10% year-over-year. Revenues of $25.6 billion were also up 10%, driven by robust margin expansion, selective balance sheet growth and higher fee-based income in our market-based businesses. Pre-provision pretax earnings of $11.3 billion were up 11%, supported by a record revenue performance and positive operating leverage. Credit quality remains resilient across our portfolios. This quarter, underpinned by our capital strength and a CET1 ratio of 13.3%, we bought back 5 million shares and announced an 8% or $0.07 increase in our quarterly dividend to common shareholders. This increase reinforces the confidence we have to deliver earnings growth with our publicly stated targets of 7% to 10%. We delivered a 13.7% ROE which is up 30 basis points versus the prior year despite an elevated capital buffer. And we remain committed to delivering a…

Thank you, Victor, and good morning, everyone. I'll begin with three takeaways from our Q4 results. First, our focus on execution and risk control growth continues to produce strong and consistent results, and we are confident that we can continue to build on that momentum in fiscal 2025. Second, we repurchased shares while continuing to strengthen our balance sheet, supported by disciplined capital allocation that balances volume and margin and prioritize the core client growth. And third, we managed a positive operating leverage for the fifth consecutive quarter, while continuing to invest in growth, our infrastructure and efficiency initiatives. Let's now move to a detailed review. I'm on Slide 10. Unless otherwise noted, results are being compared with Q4 of '23. We reported earnings per share of $1.90 for Q4 '24 or $1.91 on an adjusted basis, an ROE of 13.4%. We delivered record consolidated revenue and strong credit quality across all of our business units. Please turn to Slide 11. Adjusted net income of $1.9 billion increased 24%. Pre-provision pretax earnings of $2.8 billion were up 16%, and revenues of $6.6 billion were up 13%, supported by improved spread income, higher trading revenues and continued growth across our fee-based businesses. We continue to manage expenses relative to revenues while investing to support our strategy and posted 180 basis points of operating leverage. Provisions for credit losses were again down significantly from a year ago, Frank will discuss credit in detail in his presentation. Slide 12 highlights key drivers of net interest income. Excluding trading, NII was up 17%, driven by expanding margins and continued balance sheet growth. Total bank NIM ex-trading was up 20 basis points from the prior year and 2 basis points sequentially, mainly from higher loan and deposit margins. Canadian P&C NIM of 269 basis points…

Thank you, Rob, and good morning, everyone. Our credit portfolio's performance for 2024 was strong and ended the year at the lower end of our guidance despite the challenging macro environment. We have maintained our focus on managing our lending portfolios with prudent and effective account management strategies to mitigate risk. We remain confident in the quality and resilience of our credit portfolios. Our allowance coverage has also remained elevated and is reflective of our sound risk management. Turning to Slide 24. Our total provision for credit losses was $419 million in Q4 compared to $483 million last quarter with our allowance remaining flat quarter-over-quarter. Our performance provisions were modest at $2 million this quarter. On a full year basis, our performing allowance grew by $244 million or 8% year-over-year, mainly from additions to Canadian retail and U.S. commercial portfolios. This quarter, our provision on impaired loans was $417 million, up $13 million quarter-over-quarter. This was due to higher provisions in the U.S. commercial portfolio, partially offset by lower provisions in Canadian Banking and Capital Markets. Turning to Slide 25. Our full year provisions for credit losses on impaired loans was 32 basis points. Our retail portfolio experienced higher year-over-year losses driven by an elevated rate environment and higher unemployment. Our teams work closely with clients through these challenging times to find solutions and mitigate potential losses. Our Canadian Commercial Banking and capital markets portfolios performed very well despite the macro headwinds this year with no specific sectoral stress in either of these portfolios. We also entered the year working through the challenges of our U.S. office portfolio. I'm proud of our experienced team proactively worked through the various issues early, resulting in lower losses over the second half of the year. While uncertainty remains in the market, we are…

Thank you. [Operator Instructions] Our first question is from Matthew Lee from Canaccord Genuity. Please go ahead.

Maybe we can start with one on the mortgage business. It just sounds like the market has been pretty competitive on that front on pricing. So maybe can you talk about how you're balancing your objectives of profitability with making sure you maintain your share in that space, that particularly given the levels of renewals income that are coming back?

Good morning, Matthew, and good morning, everybody. Thank you for the question. Appreciate that. Look, I'd like to start by reminding everybody we've got a very client-focused strategy. We're distinctly focused on acquiring the right clients where we can build long-term, long-lasting deep relationships with and provide value both for our clients and our shareholders. And so, when we look at the mortgage business, we've looked at it through that context and it really is a key product for our clients. However, we've been very surgical in how we've been operating in the mortgage business. We've talked openly about the fact that we're not chasing share, and we're not competing on price. We're there to serve our clients' needs. We've operated that way this year, balancing client needs against our revenue. And when we looked at the beginning of the year, economics were a little bit more challenged, and we were more muted in our approach. So, we served our clients where we have a deep relationship, we compete hard to keep the mortgage or to consolidate the mortgage and where we have less opportunity for relationship with clients, we're more selective and we have more of an eye towards profitability. And so, when you put all of that together for this year, we were about 1% growth and the market grew a little bit higher than that. But at the same time, we significantly improved our inflow spreads, and that allowed us to improve the portfolio spreads. And it was one of the contributors to our margin increase over the year an 18 basis point improvement in NIM that we had in the business. And so, we're pleased with how we operated, but we're also looking for opportunities to accelerate. And I think you see that towards the end…

Thank you. The following question is from Ebrahim Poonawala from Bank of America. Please go ahead.

I guess maybe just wanted to follow up. So Hratch, thanks for the color, but I think, Victor, you said in your prepared remarks, mortgage growth and consumer discretionary spending to accelerate in 2025. We heard a bit of a more cautious commentary from one of your peers yesterday. I think as we try to figure out where the Canadian economy is going, are we -- is it safe to declare that the worst is behind us and things the cyclical rebound that the markets are discounting in these stocks is already underway, and we should feel confident about unemployment moving the right direction given your base case and the comment you made.

Well, Ebrahim, thank you for your question. I cannot tell you where the world is going, but I can tell you that I think our -- the regulatory environment in the U.S. and the banking landscape will likely loosen. I would expect that our regulators would look to make our level playing field as level as possible so that we can continue to compete. The Bank of Canada is being constructive, and we can see that rates are going in the right direction. This is good for all Canadians. It will help them recover. It will increase and improve business sentiment. And I think if you take all of that together, we see that as being relatively constructive. Clearly, there are geopolitical clouds in the horizon, we don't control those. What we do control is our strategy and how we go to market and how we build relationships with our clients. And as Hratch quite clearly articulated, we're not competing on price. We're competing on relationships and that matters in the banking business today. Good technology plus good people delivered in the right value proposition helps you win. And in that regard, I think we're well positioned to benefit from any upside that the market delivers and hold -- more than hold our own.

Got it. I need to follow Victor to that around. You said the regulators might level the playing field I think the expectation on the U.S. is, you're right, I think we will see more predictable maybe capital neutral to positive outcomes. Does that mean we should anticipate maybe the floor factor could get permanently change or the DSB buffer? Is the range is reduced? Like how should we think about where the regulators may level the playing field.

Our regulators have always been quite prudential in terms of how they managed our system and they're very attuned to what's happening in the rest of the world, including the regulatory environment next door. So, I won't predict where that's going, but I will say that I think that you can read the 2s in the United States in terms of where things are likely to go. And I'd like to think that we'll be given the opportunity to continue to compete for business in our own economy as well as in the U.S. economy.

Thank you. Our following question is from Doug Young from Desjardins Capital Markets. Please go ahead.

I know Victor or Rob, maybe both. But just can you talk a bit more about your discussions around lowering the medium-term ROE target and you talked about higher regulatory capital. I fully get that. But can you talk about what your set one assumption was back at the Investor Day what the CET1 assumption is today? And where do you think you can run this because I -- when I run the math, it seems like you need to have a 12.5% to 12% to get that set on rate or that ROE back up into that 15%, 16% level. So, I'm just trying to get some context and how much may even buybacks kind of factor into this?

Yes, Doug, very good question. We're quite clear that we believe in the medium term, we can get to 15% plus. That is more than consistent with our Investor Day forecast based on the new capital buffers I'm going to let Rob answer that question. But I can tell you strategically, we're very, very focused on improving our ROE over the medium term, and you will see that because we're just going to continue to execute on the strategy, which is not right, we'll deliver that premium ROE. Rob?

Thanks, Victor, and good morning, Doug. So, we did $13.4 million this quarter and 13.7% for the full year. So, there is some work to do to get to the 15% plus. There's no silver bullet. I break it down into a number of things that we're looking at. So, starting with strategy, as we always do here at CIBC, it is the deepened relationships throughout our bank that should mean better balance on both sides of the balance sheet, and it should mean incremental fee income related to things like wealth management as well. We do see better margin performance, as I suggested in my prepared remarks. Based on the forward curve, we think the margin should be a tailwind for us for the next couple of years. The efficiency opportunity, we think, is significant here at CIBC. And that's not tactical expense cuts. That's about taking out structural costs. and investing the proceeds some into the bottom line and some into growth. We do think loan losses are a little bit elevated and should come down over time. And then more dynamic balance sheet management, and you mentioned buybacks definitely factor in. We announced the buyback last quarter. We started using the buyback this last quarter, and we intend to deploy that capital fully. The 15% plus, you asked about the capital assumptions, at Investor Day was based on an 11.5% CET1 ratio. This guidance is closer to the 12.75% to 13% and that allows room. Should OSFI decide to use the last 50 basis points that's available to them on the DSP. We don't need to change our guidance for that. And there's upside if they decide for whatever reason to reduce that capital level. So, when you put that all together, it really just comes down to the disciplined execution of our strategy, consistent and continuing to do what we're doing, just more of it.

Thank you. Our following question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead.

I just wanted to quickly go to Shawn Beber. Shawn, your business on an adjusted basis, pretax pre-provision was about $230 million or $240 million, so call it run rate in close to about $1 billion. Is that a good number do you need for you looking ahead? Should you be able to do this around $240 million? Is most of the investing behind you now? And should we be -- should we start thinking about a bit more growth out of your segment looking ahead?

Thanks for the question, Sohrab. So, our growth outlook is sort of consistent with what you've heard already today. There's an uncertainty out there today, we think we're very well positioned with our clients. And our team is ready to respond to the changing environment. But when we look at our pipeline, it's strong with the uncertainty out there, it's going to take a bit of time to figure out what the timing of that growth might be over the course of 2025, but we feel good about how we are positioned to continue to outperform. In terms of the quarter, we had good results this quarter. There's some temporary benefits, as Rob talked about in terms of net interest margin that we benefited from this quarter. That will play through over the next several quarters in terms of coming back down to a more normalized level in the sort of the 350 basis point range. But I'd say, we're in a -- from this point forward, we look at our performance from a PPPT perspective as being sort of steady growth going forward.

Thank you. Our following question is from Meny Grauman from Scotiabank. Please go ahead.

Victor, during the Q3 call, I think you gave a very detailed answer in terms of capital deployment priorities. And you talked about a bias towards organic capital deployment and return of capital, but the world has changed a lot since then. The outlook for the U.S. is very, very strong, and we have the question mark around tariffs and the impact on Canada. So, the question is, does that impact your capital deployment thinking? And maybe put it more directly, why not get bigger in the U.S. quickly and inorganically to take advantage of is likely to be a booming U.S. economy, you already have a base there, but why not get more aggressive right now?

Good morning, Meny. So, thank you for your question. Clearly, there's a lot of fluidity going on out there in the geopolitical environment. Our relationship with the United States is long-standing and important but continues to evolve. So let me just make a couple of comments on that because people may want to know what's on our mind. What's on our mind is we should control the controllables, as a country. And our policymakers should do everything possible to help us drive GDP growth here because that's as important as benefiting from GDP growth in the United States. Things like creating a free trade agreement within our country, providing the incentives for entrepreneurs and capital to be deployed in areas that matter, including AI technology, health care, defense spending within our country in a nascent defense industry, and a clear strategy of regulation that allows businesses to grow and create jobs. So that's my message to them. All our leaders need to be thinking about that. What we think about as a leadership team at CIBC is to continue to stay focused on our clients. We believe that there continues to be a robust amount of growth in the Canadian market. Yes, we have leadership positions in certain products and services and categories, but we're competing to win in the Canadian market, and we will deploy capital in the U.S. market, all in a very balanced way. To be strong in the U.S., you have to be strong at home. And therefore, we're going to focus on our Canadian business and our U.S. business and really serve those clients that meet our risk appetite and the value having a relationship with a bank that helps them achieve their growth ambitions. Simple as that. And that will mean growth in Canada, in the consumer, commercial and capital markets and wealth management businesses as well as our presence in the United States, balance growth.

So just if I could follow up on that. I guess what you're saying is you don't feel an added urgency to deploy capital in the U.S. Is that correct here?

So, Meny, really, your question around capital allocation, let me just go back to our principles. Our principles are all about organic investment and investment in our platform, organic with the capital O. The second thing is to continue to grow our dividends with earnings. And I think we did that again this year as we start on the new fiscal year. The third is to use buybacks as Rob articulated already. And when it comes to inorganic, I think we've been quite clear that tuck-in M&A to strengthen our businesses, particularly in the U.S. wealth space would be something that we have our intent upon, but it really is about our organic growth strategy and driving a premium ROE.

Thank you. Our following question is from Lemar Persaud from Cormark. Please go ahead.

Just a point of clarification, Rob. When you said earlier, you see margin as a tailwind for the next couple of years. Are you talking about all bank net interest margins? Are you talking more along the lines of marginal growth? And then if I could squeeze another quick one in here, just the outlook for the tax rate moving forward.

Thanks, Lamar. So yes, we think the margin at the all-bank level and at the Canadian P&C level, that's stable to gradually higher from here, continues to make sense. We've talked in the past about the way we position our balance sheet and the tractoring strategy and how that's going to play out, how we expect it to play out based on the forward curve, that consistent upward gradual trajectory is what we're looking for. On the tax rate, so we were 22% effective tax rate this year. We disclosed in the MD&A, the impact of the global minimum tax is somewhere around 100 basis points for us. So, the guidance for next year on tax would be in the 23% to 24% range.

Thank you. Our last question is from Gabriel Dechaine of National Bank Financial. Please go ahead.

Just first one on the credit guidance, that's been reiterated. And if I'm understanding you correctly it’s that the loss rate will be higher in the start of the year and the grade down over the course of the year. It's consistent with what another bank said and in contrast with different banks. Just wondering why your outlook might be different? I know these portfolio trends and all that stuff that play a role. Is it largely because the -- that CRE office portfolio loss rate continues to decline and that's going to offset stuff over the course of the year?

Well, thanks, Gabriel. Thanks for the question. I think that is part of it. But part of it is also the strength we are seeing in our Canadian commercial books. The strength we have seen in our corporate books. That is certainly helping us, maintaining our guidance. And as I said in my prepared remarks, some of the economic uncertainties subside, we would expect to be at the lower end of the guidance. But it's really a lot of moving parts going into that guidance and a lot of analysis and scenarios. And as you said, in part, we expect the U.S. to come in, in lower, but we also do expect Canadian retail continuing to trend up slightly in line with the macroeconomic developments and then come down in later.

Okay. Great. And then a conceptual one, I guess, for Victor and or Rob or both. So, this ROE target, it's I guess, one of the big moving -- one of the big factors affecting it is the regulatory capital requirement, which has changed since the Investor Day. We all know that -- so your -- I guess, your base assumption is maintaining a 12.5% to 13% core Tier 1 ratio. Like what if the domestic stability buffer has cut back substantially, do you change that management target range or do you keep it static because it could always go back up? I'm trying to get an understanding of how fluid your core Tier 1 ratio target is because, as I just mentioned, the capital requirements could be reduced, but they can also be held back because some might just say, hey, let's plan as if that maximum is an effect always.

Gabriel, it's a good question. I'm not going to speculate on what our regulator will do. I will tell you, we have a good regulator that manages our banking system for strength and stability, and we will react to any policies that they put in place. As I said earlier, I think it's really, really important for policymakers across the spectrum to be thinking about how to drive economic growth in Canada, given how the conditions are changing in the United States. We don't want to be diverging. We don't want to be lagging. We don't want the GDP per capita in Canada declined relative to the U.S. And every decision that helps drive economic growth is something that's welcome and I can tell you that our CIBC leadership team will react to any decision to drive growth in a continued positive way for our clients. Rob, anything else for you to add?

Yes. I guess the only thing because Gabe, you mentioned what do you do if that DSP changes. The reason we said $12.75 million is more -- we didn't want to come back here in six months or a year and say, well, we have to revise the guidance again because the minimum has changed. We feel like the 12.75% to 13 puts us in a position where there's upside if it comes down, but we're not worried that there's downside if it goes up.

Yes, no, no. I'm talking more about the upside if it goes down. Is it -- so this is really a fluid management target range if it goes down? You react to a reduction if that were to happen and that's perfectly rational, but it's also perfectly rational to assume that the higher requirement is maintained. So, it can make managing your ROE target difficult, I guess, is what I'm saying.

I think, Gabriel, just over the medium term, that 15% plus is what we work toward delivering irrespective of the environment. I mean, if the environment gets really negative for all banks, and that will be a difficult conversation for everybody. But if we assume we have benign constructive economic environment, the CIBC leadership team will work toward delivering that 15% plus.

All right. Great. Well, congrats on the full year. Take it easy.

Thank you. We have no further questions registered at this time. I would now like to turn the meeting back over to Victor.

Thank you, operator, and thank you for all the thoughtful questions you've shared with us this morning. I hope to see CIBC story and key messages from today have resonated with you. We're delivering strong results through consistent execution of our strategy, and we're well positioned for the years ahead. The goal for our investor base has always been to deliver sustainable relative outperformance over any time horizon, and I believe and we believe we're achieving this objective. Giving back to our communities is also deeply embedded in the CIBC culture. Yesterday marked the 40th anniversary of Miracle Day here in Canada where our capital markets team and Wood Gundy Investment Advisors donated their fees and their commissions for a day to raise money for children in need. We've been doing this for over four -- almost for four decades and have raised almost $300 million for kids. It was a huge success again yesterday, and it's a tradition that we're incredibly proud of support because it reflects the bank that we are. Finally, I'd like to close out by extending a sincere thank you to our entire CIBC team. I've always said that banking is a team sport. It is truly our whole team that is driving the momentum to deliver for our clients, for our shareholders, for our communities and for one another within our bank. I want to wish you and all your families a wonderful holiday season. I hope you get to recharge the batteries, and we look forward to catching up in the new year. Take care.

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