Canadian Imperial Bank of Commerce

Strong Q3 results + operating leverage (good): Adjusted EPS $2.73 (+26% YoY) on revenues of $8.0B (+15% YoY). Expenses up 11%, but positive operating leverage continued (12th consecutive quarter). Pre-provision pretax earnings $4.0B (+20%); efficiency ratio improved ~200 bps YoY. Adjusted ROE 16.8% (+260 bps YoY). Bank remains confident in the durability of earnings power.

Credit: resilient but with pockets of elevated impairments (mixed/negative): Total Q3 provision $564M (vs $605M last quarter); impaired loan provisions $612M (+$64M QoQ) driven mainly by a few specific events in Canadian Commercial Banking and Capital Markets. Allowance coverage ended at 81 bps (up from 80 bps). Management expects impaired losses in/around current elevated range for the rest of the year, while maintaining confidence in credit quality. Tariff/geopolitical risk overlay continues; most sensitive tariff exposures are <1% of total loans.

Net interest margin outlook: stable to gradually positive (good forecast): All-bank NIM expected to be “stable to gradual positive bias over time”; similarly Canadian P& B NIM expected to follow the same direction (supported by hedging/tractoring strategy and mix). In the U.S., NIM dipped ~14 bps QoQ (management attributes roughly half to loan growth outpacing deposits and half to business factors including pricing compression), but management sees seasonal reversion.