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    CM
    Earnings call· Oct 2025(Q4 FY25)

    CANADIAN IMPERIAL BANK OF COMMERCE /CAN/ CM

    Dec 4, 2025 Source

    Executive summary

    Canadian Imperial Bank of Commerce Q4 FY25 — Record Performance and Increased Dividend

    CIBC delivered a record Q4 FY25, driven by strong revenue growth across all segments and disciplined execution of its client-focused strategy. The bank achieved positive operating leverage and a higher return on equity, leading to a 10% dividend increase. While credit provisions rose due to performing loan builds and some impaired loan increases, management expressed confidence in credit quality and a stabilizing outlook for 2026. The bank is committed to accelerating execution, driving efficiencies, and leveraging technology, including AI, to sustain momentum and achieve a premium ROE.

    Highlights

    5

    • Record revenues of $29 billion for FY25, up 14% year-over-year, with double-digit growth across all businesses.

    • FY25 net earnings of $8.5 billion and EPS of $8.61, up 17% and 16% respectively from the prior year.

    • Achieved positive operating leverage and lowered enterprise efficiency ratio for the third consecutive year.

    • Robust CET1 ratio of 13.3% supported a 10% increase to the quarterly common shareholder dividend.

    • FY25 Return on Equity (ROE) of 14.4%, up 70 basis points from the prior year, with a target to exceed 15% in FY26.

    Concerns

    5

    • Total provisions for credit losses (PCL) were up 44% year-over-year in Q4 FY25, largely due to higher performing provisions of $108 million.

    • Expenses increased 10% in Q4 FY25 due to investments, seasonal costs, higher severance, and a software write-down and legal provision in Canadian P&C.

    • Elevated expense growth in U.S. Commercial Banking and Wealth Management, up 18% in Q4 FY25, driven by performance-based compensation and strategic initiatives.

    • Gross impaired loan ratio increased 5 basis points quarter-over-quarter to 61 basis points in Q4 FY25, driven by one new impairment in Capital Markets.

    • 90-plus day delinquencies in credit cards and residential mortgages increased quarter-over-quarter due to challenging macroeconomic conditions.

    Guidance & targets

    8
    CategoryTargetConfidence
    Expense growth
    mid-single digits
    medium materiality
    High
    Operating leverage
    positive operating leverage on an annual basis
    medium materiality
    High
    Return on Equity (ROE)
    above 15%
    high materiality
    High
    Adjusted EPS growth
    high end or higher than 7% to 10% medium-term target range
    high materiality
    High
    Corporate and Other net loss
    $0 to $50 million
    low materiality
    High
    Impaired provisions
    mid- to low 30 basis point range
    high materiality
    Medium
    Net Interest Margin (NIM) trajectory
    gradually higher from these levels, albeit at a slower rate than what we saw in fiscal '25
    high materiality
    Medium
    Private credit / NBFI exposure growth
    high single-digit growth
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Canadian Personal and Business Banking
    Strong revenue growth was largely offset by higher provisions for credit losses and higher expenses. Revenue growth was helped by margin expansion and favorable business mix. Expense increase was due to investments in technology, strategic initiatives, higher employee compensation, a software write-down, and a legal provision.
    Pre-provision pretax earnings: up 14%Net interest margin: 290 bps (up 33 bps YoY, up 11 bps QoQ)Expenses: up 10%
    		—12%—stable net income YoY
    Canadian Commercial Banking and Wealth Management
    Net income and pre-provision pretax earnings saw strong year-over-year growth. Revenue growth was robust, particularly in Wealth Management. Expense increase was mainly due to higher compensation linked to strong revenues and increased spending on technology and strategic initiatives.
    Pre-provision pretax earnings: up 13% YoYWealth Management growth: 18% (driven by higher average fee-based assets, market appreciation, client activity)Commercial Banking revenues: up 9% (driven by volume growth and margin expansion)Commercial loan volumes: up 10% YoYCommercial deposit volumes: up 9% YoYExpenses: up 16% YoY
    		—15%—net income up 9% YoY
    U.S. Commercial Banking and Wealth Management
    Net income increased significantly due to lower loan loss provisions. Revenue growth was broad-based, with net interest income benefiting from deposit growth and wider deposit margins. Expense increase was partially due to higher performance-based compensation and strategic initiatives, with normalization expected next year.
    Deposit growth: 8%Expenses: up 18%
    		—9%—net income up 35% YoY
    Capital Markets
    Strong performance across the segment, with Global Markets showing growth across most products, Corporate Banking benefiting from higher average balances and fees, and Investment Banking seeing higher debt underwriting and advisory revenues. The U.S. market continues to be a significant growth driver. Expense increase was due to investments in business and technology, higher compensation, and volume-driven expenses.
    U.S. revenue growth: 48% YoYU.S. segment revenues as % of total: 38%Expenses: up 9%
    		—32%—net income up 58% YoY
    Corporate and Other
    The net loss of $42 million compares to a net loss of $7 million in the prior year. The segment maintains its medium-term guidance of a quarterly loss between $0 and $50 million.
    		———net loss of $42 million

    Operational metrics

    23
    Adjusted Net Income
    $2.2 billionup 16% YoY
    Q4 FY25

    Adjusted net income for the quarter, with amortization of intangibles as the only adjusting item.

    Pre-provision earnings growth
    20%
    Q4 FY25

    Pre-provision earnings growth for the quarter, reflecting strong revenue momentum.

    All bank margin ex trading
    up 14 bpsYoY
    Q4 FY25

    Expansion in the overall bank margin, excluding trading activities.

    Noninterest income
    $3.4 billionup 15% YoY
    Q4 FY25

    Total noninterest income for the quarter.

    Market-related fees
    up 18%YoY
    Q4 FY25

    Growth in market-related fees, driven by constructive markets and strong growth in trading, underwriting, advisory, and mutual fund fees.

    Transaction-related fees
    up 8%YoY
    Q4 FY25

    Growth in transaction-related fees, mainly from higher credit fees, partly offset by lower card fees.

    Total provisions for credit losses
    $605 millionup from $559 million QoQ
    Q4 FY25

    Total PCL for the quarter, with a significant year-over-year increase.

    Performing provision for credit losses
    $108 million
    Q4 FY25

    Performing provision for the quarter, mainly reflecting the evolving economic environment and credit migration.

    Impaired provision for credit losses
    $497 millionup $16 million QoQ
    Q4 FY25

    Impaired provision for the quarter, with increases in Capital Markets and Canadian Commercial Banking.

    Allowance coverage ratio
    80 bpsup 2 bps QoQ
    Q4 FY25

    Strengthening of allowance coverage for credit losses.

    Total allowance for credit losses
    up $625 millionup 15% YoY
    FY25

    Increase in total allowance for credit losses over the fiscal year.

    Liquidity Coverage Ratio (LCR)
    132%
    Q4 FY25

    Average LCR, indicating a strong liquidity position.

    Capital Markets U.S. revenue growth
    39%YoY
    FY25

    Strong revenue growth in the U.S. Capital Markets franchise.

    Capital Markets U.S. net income growth
    50%YoY
    FY25

    Significant net income growth in the U.S. Capital Markets franchise.

    Capital Markets U.S. revenue contribution
    38%
    Q4 FY25

    Proportion of total Capital Markets segment revenues derived from the U.S. market.

    Private credit / NBFI exposure
    —
    Q4 FY25

    Discussion around the global credit financing business, which includes private credit and non-bank financial institution (NBFI) exposures. While specific total exposure was not quantified, its characteristics, risk profile, and contribution to ROE were detailed. Management indicated a more measured growth approach going forward after a period of rapid expansion.

    Capital returned to shareholders
    over $5 billionapproximately 2/3 of net earnings
    FY25

    Total capital returned to shareholders through dividends and share repurchases for the fiscal year.

    Canadian P&C demand deposits growth
    double digits
    FY25

    Growth in profitable demand deposits within the Canadian P&C segment, reflecting strategic focus.

    Canadian P&C cards business growth
    6%
    FY25

    Growth in the cards business within the Canadian P&C segment.

    Cross-business referrals
    up 23%YoY
    FY25

    Increase in cross-business referrals within the U.S. Commercial and Wealth franchise, demonstrating the effectiveness of the connected platform strategy.

    U.S. Commercial Banking and Wealth Management expense normalization
    mid-single digits
    FY26

    Expected expense growth for the U.S. segment to normalize in line with the broader bank's guidance.

    U.S. branch network optimization charge
    $10 million
    Q4 FY25

    One-time charge related to optimizing the U.S. branch network, with expected annual savings.

    Organic capital generation
    10 bps
    quarterly

    Expected quarterly organic capital generation, indicating continued internal capital build.

    Industry KPIs

    13
    MetricValueDetails
    Loansup 10%%
    Depositsup 9%%
    Rotce ROE14.4%%
    Cet1 ratio13.3%%
    Capital returns10%%
    Fee income linesup 15%%
    Allowance reserves80 bpsbps
    Net interest incomeup 14%%
    Net interest margin290 bpsbps
    Net charge offs npls61 bpsbps
    Total operating expensesup 10%%
    Provision for credit losses$605 millionCAD
    Efficiency ratio operating leveragelower

    Product announcements

    2
    ProductTypeDetails
    Digital banking platformlaunch
    CIBC Real-Time Experience (Cortex)launch

    Risks & headwinds

    4
    Trade negotiations uncertaintyyear ahead (2026)

    uncertainty in Canada and abroad

    Mitigation: Outlook assumes trade deal is extended; proactive engagement with clients regardless of environment evolution.

    Challenging macroeconomic conditionsQ4 FY25

    increased 90-plus day delinquencies in credit cards and residential mortgages

    Mitigation: Proactive approach to maintaining prudent reserves; confident in overall resilience and strength of portfolios; expect impaired provisions to stabilize in mid- to low 30 bps range in FY26.

    Elevated unemployment levelsongoing

    key driver of net write-off metric

    Mitigation: Monitoring unemployment levels; pleased with overall resilience and strength of portfolios.

    Concentration of funding/capital in global credit financing businessfuture

    rapid growth in the past

    Mitigation: Diversifying resources; not concentrating all funding/capital in one area; expecting high single-digit growth in this area for FY26, rather than continued rapid expansion.

    What to watch in Q1 FY26

    5

    Return on Equity (ROE)

    FY26
    Current14.4% (FY25)
    Targetabove 15%

    Why it matters

    Achieving the 15%+ ROE target is a key commitment for the new CEO and a significant driver of shareholder value, indicating successful strategy execution.

    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.

    Q&A highlights

    5

    Given CIBC's 15% ROE target for FY26, what are the opportunities for the bank to achieve a 'best-in-class' ROE (17-18%) like some peers, or are there structural disadvantages? What needs to be done differently to get there?

    Management believes the current strategy positions them for profitable growth and a premium ROE, with no structural disadvantages preventing higher ROE. They highlighted levers such as normalizing credit losses (60 bps ROE tailwind), consistent positive operating leverage (30-40 bps ROE expansion), and optimizing capital deployment (40-50 bps ROE from 40-50 bps CET1 reduction). They are not changing the target now but have ambitions for higher ROE beyond 15%.

    “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.”

    asked by Ebrahim Poonawala · answered by Robert Sedran

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Priorities and Evolved Ambition

    CIBC's new President and CEO, Harry Culham, outlined an evolved ambition to be a client-focused, highly connected, and performance-driven bank, aiming for industry-leading shareholder returns. This ambition is underpinned by consistent strategic pillars, with a focus on accelerating execution. Key enablers include sharpening client focus and connectivity, driving efficiencies and modernization, and elevating human capital through engagement and accountability. The bank's strategy remains consistent and is focused on delivering relative outperformance.

    02

    Mass Affluent and Private Wealth Franchise Growth

    The bank's first strategic priority is to grow its mass affluent and private wealth franchise, leveraging its unique ecosystem including Imperial Service, Costco partnership, Wood Gundy, and U.S. RIA. This focus has led to market share gains in mutual funds and top-two ranking among Big 6 banks for total mutual fund net sales in 2025. The strategy aims to generate capital-light fee-based revenue, gather high-value personal deposits, and drive wealth referrals, all contributing to an improved ROE profile.

    03

    Digital-First Personal Banking and AI Adoption

    CIBC is prioritizing digital-first personal banking, recognized with the 2025 Mobile Banking Award. The bank launched a new digital banking platform for the U.S. market, building on its Canadian capabilities. Significant strides were made in embedding AI, including the launch of 'Cortex,' a proprietary AI-enabled client engagement engine. The bank plans to accelerate AI adoption, focusing on Agentic AI and continued investment in talent and partnerships to transform banking experiences and drive efficiencies.

    04

    Connected Platform and U.S. Expansion

    Leveraging its connected platform is a key strategic priority, fostering cross-business referrals and expanding the U.S. franchise. Cross-business referrals in the U.S. Commercial and Wealth franchise increased 23% year-over-year. The Capital Markets U.S. franchise demonstrated strong growth, with revenue up 39% and net income up 50% from the prior year in FY25, and is expected to continue outpacing Canadian growth over the medium term⏳.

    05

    Credit Performance and Outlook

    Despite economic uncertainties, CIBC's credit performance remained resilient in FY25, with an impaired PCL ratio of 33 basis points, at the low end of guidance. Total PCL in Q4 FY25 was $605 million, with a performing provision of $108 million reflecting economic environment and credit migration. The gross impaired loan ratio increased to 61 basis points. For FY26, impaired provisions are expected to stabilize in the mid- to low 30 basis point range, assuming gradual macroeconomic improvement, representing a slightly improved outlook.

    06

    Capital Position and Deployment

    The bank maintains a robust CET1 ratio of 13.3%, supported by solid organic capital generation. A 25 basis point adjustment to operational RWAs is expected in Q2 FY26, further boosting the CET1 ratio. CIBC returned over $5 billion, or approximately two-thirds of net earnings, through dividends and share repurchases in FY25. The bank aims for a CET1 ratio of about 100 basis points above the regulatory minimum (around 12.5%) and continues to pursue profitable growth and opportunistic tuck-in acquisitions.

    AI-generated summary of the company’s earnings call. Not investment advice.