All participants please standby, your conference is ready to begin. Good morning, ladies and gentlemen. Welcome to the CIBC Second Quarter Results Conference Call. Please be advised that this call is being recorded. To reduce the audio interference, please turn your Blackberry off for the duration of the meeting. I would now like to turn the meeting over to Geoff Weiss, Senior Vice President, Investor Relations. Please go ahead Mr. Weiss.

Good morning and thank you for joining us. This morning CIBC’s senior executives will review CIBC's Q2 2015 results that were released earlier today. The documents referenced on this call, including CIBC's Q2 news release, investor presentation and financial supplement, can all be found on our website at cibc.com. In addition, an archive of this audio webcast will be available on our website later today. This morning's agenda will include opening remarks from Victor Dodig, CIBC's President and Chief Executive Officer; Kevin Glass, our Chief Financial Officer will follow with the financial review; and Laura Dottori-Attanasio, our Chief Risk Officer, will close the formal remarks with the risk management update. After the presentations, there will be a question-and-answer period that will conclude by 9:30 a.m. With us for the question-and-answer period are CIBC's business leaders, including Geoff Belsher; Harry Culham; Steve Geist; and David Williamson, as well as other senior officers. Before we begin, let me remind you that any individual speaking on behalf of CIBC on today's call may make forward-looking statements that are subject to a variety of risks and uncertainties. These statements may include material factors or assumptions that could cause CIBC's actual results in future periods to differ materially. For more information, please refer to the note about forward-looking statements in today's press release. With that, let me now turn the meeting over to Victor.

Thanks, Geoff. Good morning, everyone and thank you for joining us on our call today. CIBC reported solid second quarter results this morning with adjusted earnings of $924 million or $2.28 per share, which is up 5% from the same period last year. We also delivered our 22nd consecutive quarter of adjusted return on equity in excess of 20%, and our Basel CET1 ratio remained strong at 10.8%. As well, this morning we announced a $0.03 increase to our quarterly common dividend to $1.09 per share consistent with our plan to move our dividend pay-out ratio to the upper end of our 40%-50% pay-out range. Our strong results were driven by growth from all of our business units, backed by continued progress on our client focused strategy. To strengthen relationships, we are listening to our clients and delivering to them service they need in the manner they want. With today’s fast paced lifestyle and increasing dependence on technology, what they want is banking that’s easy, flexible and personalized. Easy, so that banking is not a time consuming task; flexible, so they can bank where, when and how they want; and personalized, so that our financial advice is customized to their needs, and that’s why we have repositioned our brand from for what matters to banking that fits your life. We want our brand to reflect our strategy of focusing on our client’s needs, our relationships with them and the quality with which we serve them. So while there’s more to do, we are well in our way to realizing our vision of being the leader in client relationships. To make banking easy, we’ve upgraded several platforms and streamlined several processes in all of our business units. To make banking flexible, we provide our clients with multiple channels from which to…

Thank, Victor. My presentation will refer to the slides that are posted on our website starting with slide 6, which is a summary of results for the quarter. CIBC delivered reported net income of $911 million and adjusted net income of $924 million in the second quarter of 2015; adjusted EPS was $2.28 which is up 5% year-over-year. These results were driven by strong performance across all of our businesses. The quarter reflected strong volume growth and a higher net interest margins in our retail and business banking business, wealth management achieved 11% earnings growth, driven by solid asset growth, and we delivered strong client driven performance in wholesale banking. Also we increased our quarterly dividend by a $0.03 per share. We had two items of note during the quarter which nets to a negative impact of $0.03, per share an after tax loss of $5 million from our structured credit run-off business and amortization of intangible assets of $8 million after tax. The balance of my presentation will be focused on adjusted results, which excludes these items of note. We’ve included slides with reported results in the appendix to this presentation. Let me now review the performance of our business segment, starting with the results for retail and business banking on slide 7. Revenue for the quarter was $2 billion, up 5% from last year, driven by strong results in both personal and business banking. Revenue in personal banking was 1.6 billion, up 5% compared with last year. Performance benefited from volume growth, higher fee income and strong mutual fund sales. Mortgage growth of 5% was helped by above market growth in CIBC brand mortgages of 15% partially offset by the run-off of the first line broker business. We continue to see strong personal savings growth with client deposits…

Thanks Kevin. Good morning everyone. So I will be referring to the risk section which begins on slide 13. You will see that loan losses came in at a $197 million or 30 basis points. So that’s up $10 million or 2 basis points from the prior quarter, and this is mainly due to higher losses in our business banking portfolio, higher insolvencies in retail, both of which were partially offset by lower losses in wholesale banking. Turning to slide 14, you will see that new formations were up slightly quarter-over-quarter. They came in at $338 million, which is in line with the same quarter last year. Gross impaired loans were down 86 million from the last quarter, and that’s largely due to decreases in the personal lending portfolio and the business services sector, as well as the impact of the US dollar depreciation. So gross impaired loans as a percentage of gross loans and acceptances came in at 0.53%, which is down quarter-over-quarter and year-over-year. Slide 15 shows our oil and gas portfolio, and as it relates to our commercial corporate portfolio, we have just under $17 billion of direct exposure, that’s unchanged from last quarter. 58% of it is to exploration and production companies and only 4% of it is in the services space. 77% of our exposure is to investment grade companies. This quarter one of our oil and gas accounts became impaired and we took at $10 million provision on it. Our loans outstanding decreased 6% quarter-over-quarter and was due to reduced drawings and foreign exchange impact. On the next slide, slide 16, you can see our retail portfolio as it relates to the oil and gas provinces. So we have $38 million of indirect retail exposure and if you exclude insured mortgages, we have 16…

Thank you Laura. That concludes our prepared remarks, and we’ll now move to the question and answer segment of the call. Operator can we please have the first question on the phone.

[Operator Instructions] Your first question is from John Aiken of Barclays. Please go ahead.

In terms of the capital position, you got the 10.8% obviously the lift in the quarter from the sale of Butterfield, and I am not complaining in context of your ROE. But I was a little surprised that you haven’t been active on the NCIB through the length of the program. Presumably this is because you still continue to see or seek out opportunities within wealth management for acquisitions. But at what point do we essentially shutter this and start to return additional amounts of capital over and above the dividend increases that you’ve provided.

Good morning, John. Thanks for your question. A couple of things, one is, our CET1 is at 10.8, that’s only slightly above our stated range of 9.5 to 10.5. This quarter as you noted, we did get a lift from Butterfield, we actually got a lift from the impact of rising rates in our pension plan which were kind of one-off lifts. Our strategic objective and it’s important to kind of note this, strong financially, innovative technologically and relationship oriented are the three factors that we’re really focused on as a bank and we believe as a leadership team that strong capital ratios are going to be an important element of our strategy. We’ve been clear in the past about our four avenues for investing in our business and delivering returns to our shareholders. One is dividend, we did that again today; two is investing in our business across all of our business lines particularly in technology to modernize our bank; three is M&A, and four is buybacks. On those last two, those are always avenues, but on the M&A front, we are going to be disciplined. We are going to patient, because we don’t see any criteria from an acquisition standpoint to meet our criteria. And the last thing I’d say is, buybacks are an avenue. I wouldn’t consider shuttering them. I think that’s an avenue that needs to be left opened to the management team and we’ll pursue that when we see fit.

Thank Victor, and just as a follow-on in terms of the sale of Butterfield during the quarter, can we read anything into this or was this just timing in terms of the buyer and your selves coming to an agreement?

Yeah, Butterfield is a good bank. You should just read into this focus. It was a minority investment for us, we are getting focused on our business and our core business is where we have significant presence and we wish to grow and that’s really what it was.

Understood. Thanks, Victor.

The following question is from Steve Theriault of Bank of America/Merrill Lynch. Please go ahead.

A couple of questions, first for David if I could. David you delivered positive operating leverage a little earlier than expected. I think you were telegraphing second half of the year, so that’s certainly a good thing. But just wondering how you feel about the sustainability of the momentum. Do you feel like you’ve turned a corner now after a period of reinvestments and lagging some peers on that front? How are you feeling second half of the year and into next year?

Yes, operating leverage was positive this quarter, and as we’ve stated in prior conversations and calls, we are investing in the business and we’ll continue to do. So the expense side of the equation came in on track with our expectations. The revenue growth came in a bit stronger than expected and that’s what resulted in positive operating leverage occurring earlier in the year than we had originally anticipated. So to speak to going forward, let me just give you a sense of the nature of the result that have generated that revenue growth. First comment I’d make is it’s coming out of both sides of the balance sheet, both the liability side and the asset side. And that’s as a result of our focus on deeper relationships with our client base. So if we look at the liability side, for year-to-date we are leader in market share growth and deposits, and we are leader in overall money into the bank across personal and business banking. And that’s while supporting a record 2.5 billion in net sales in long term mutual funds through our retail channels. If we look on the lending side, as Kevin commented in his remarks, we’ve got a 15% growth in mortgages balances outstanding in the CIBC brand. A highlight, Steve, a point that we are kind of excitable this quarter which is some time ago we’d set a target of retaining 25% of the first line book. We achieved that this quarter, and there’s still 16 billion of first line mortgages available for potential conversion. If we include the run-off of the first line book, we still this quarter have grown our overall mortgage book by 5%. In personal lending, second in market share growth and that is a business that quite frankly we lagged…

Just to follow-up the non-traveller card, do you have other potential partnership cards in the hopper or going forward is it going to be just doing better with what you have?

Yeah, Steve, I’d say going forward it’s been going on in the background, but I think now the focus is the stable of cards we have and working with them to optimize them. So a couple of launches and there is as you know a lot involved in getting a card launched and there’s a period of time thereafter that if that does [adversely] [Ph] affect earnings until outstandings is filled, we are in that period now on two cards. So the intent really is to focus on the cards in the stable including our cash back cards where we are looking to make sure that they are set up ideally in the current market place and we haven’t looked at those cards for a number of years. So they are ready for a refresh.

So I take everything you said, it sounds to me like you sound pretty confident that the revenue momentum will likely persist at least in the near term.

Yeah, we are up against strong competitors, it’s a competitive market place and we’ve got as Victor talked about some macro factors that still have to play out in the market place. Our mission is to make sure on a relative basis we are performing well and I feel like after a period of years as far as the retail and business banking operations CIBC lag someone. We are now definitely not lagging and in a few areas leading and I would like to believe we’ll maintain that.

Second question was for Harry likely federal budget targeting some tax efficient trading businesses. I know the outcome’s uncertain. Can you tell us how much of your TEB, your capital markets or your consolidated earnings are linked to this tax strategies that have come under scrutiny.

Thanks Steve for the question. As you might imagine we are working with our clients to determine how they would maintain exposure to equities in the future. It’s a proposal, we are enacted as written and it is possible that some of the current strategies would continue at potentially different price levels or their clients will see different strategies. The outcome of our analysis with clients may result in some resources currently used in the business being freed up by the deployment opportunities. So with that said, to quantify this point in time, if the budget is enacted as tabled, our best estimate is a 2%-3% earnings impact in the first year of implementation, but the diminishing impact thereafter as resources are deployed in to other strategies.

And 2%-3% is after some level of mitigation or you are not really thinking of the mitigation till a year or two and forward.

You know some mitigation is also in there.

Okay, that’s helpful. Thank you.

Thank you. The following question is from Stefan Nedialkov of Citigroup. Please go ahead.

A question I guess for Victor really. What’s the latest on your wealth management strategy in terms of M&A, particularly how this evaluations and what is the direction of travel here. Are things becoming more unsafe or cheaper? How about geography and how about size, are you guys still looking around 2 billion? Thank you.

Okay Stefan, so I’ll comment and I’ll also pass it on to Steve Geist. I mean we’ve been pretty consistent. From the very top line view our goal is to grow wealth management to be a more contributor to CIBC’s earnings. The goal we set a couple of years ago was 15%. We are almost there, thanks to the performance of our domestic business and the investments that we’ve made in the US. We’ve been pretty clear with our parameters which are - we are really interested in the private banking and asset management space, we are really interested largely in the US market being the most natural - building on our existing foundational that we’ve been made. And we’ve been pretty clear that the size range is in the 2 billionish range that could be 2 to 3. But that’s the range that we’re looking that, that hasn’t changed. Now on valuations and what we are seeing out there Steve may be you want to comment on that.

Sure, thanks Victor. Hello Stefan. There are always opportunities and we continue to have discussions and we are being very, very disciplined in terms of valuation and consistency with our strategy and looking for opportunities exactly as Victor has highlighted and we’ve been highlighting for some time. The things are definitely not cheap, I don’t know if they’ve ever really been cheap. But we will continue to have discussion and pursue opportunities if appropriate. The important with respect to the wealth management story is to highlight our organic growth. Where this quarter we did deliver double-digit asset and revenue growth strictly organically, so we expect to deliver solid growth independent of any inorganic activity. So that takes the pressure off of us needing to pursue other opportunities and they will just be accentuators and added opportunities on half of the momentum that we have once we are able to put something together that fits our parameters.

The clear consistent discipline, that the focus that we have Stefan. Thanks Steve.

[Operator Instructions]. The following question is from Sohrab Movahedi of BMO Capital Markets.

Victor just a quick question, I guess you’ve talked about the modernization process, evolution whatever that you are on right now. David is giving us the operating leverage [helped] with the top line growth and what have you. But you haven’t taken the restructuring charge. Is that something you may do at some time in the future or are you just doing it without having to take those types of charges.

Sohrab thanks for your question. What we do is we take a medium term to long term view, and we’ve been really working diligently as a leadership team to balance the need for expense management with investing in the smart areas that are most relevant to our clients and we’ve been able to deliver that over the last number of quarters. We’ll continue to maintain that focus. It’s always a balance, we need to see what traditional expenses sort of remove from the banking system, but then we can reinvest those in to modernizing our bank. And I would say that we are well on our way not only in retail and business banking which David has been articulating and signaling for quite some time now, but we’ve been doing the same thing in wholesale where you see our derivatives business and our foreign exchange business has grown as a result of technology investments as well as in wealth management.,

So just absorbing it in the run rate.

That’s the goal as best as we can. But we need to be sort of smart about things, and sometimes if you need to do things faster, we’ll manage things accordingly. Kevin do have anything you want to add here.

I’d say we did take a charge in Q4 and I think we need to as Victor says, run the business on a consistent basis and where required we will take a charge. Going back to Q4 we did take a charge but it’s a case of staying on top of our business and adjusting where appropriate. I mean it was relatively small, but we’ll adjust as appropriate.

The following question is from Robert Sedran of CIBC. Please go ahead.

Victor I’d like to come back to the topic of the dividend. It seems like you are comfortable operating higher in the target range than some of your peers are. And if I had to guess your international ambition don’t require as much capital to support the organic growth. I mean it will need the odd slug here and there to absorb goodwill, I guess. But you don’t need as much for organic growth. So would you contemplate a 45% to 55% payout ratio, and would that give you enough capital to sustain organic growth and still maintain that higher payout.

Rob thanks for your question. Our stated payout range is 40% to 50% and I see it staying there in the foreseeable future. What we said in the past call and what we are telling you today is that our goal is to move to the higher end of that. Right now on a year-to-date we are in the mid-point of that range, we are at 44.9%. Our intention is to continually increase our dividends until we approach the higher end of that existing range of 40% to 50%. And the reason we feel comfortable in doing that; we are setting this on the context of our business performance. Our businesses are performing well, the strategy that we laid out around consistent sustainable earnings, smart organic investments to drive those earnings is the delivering the ability to deliver dividends to our shareholders and dividend growth to our shareholders. And as long as the macroeconomic revival remains constructive, we are confident that we can move to the higher end of that range of 40 to 50.

So even with Harry's disclosure of sort of the 2% to 3% from the budget impact do you still feel like there's room to continue to move this dividend from higher from here?

I think there Rob. We are being very, very sensible. We said the higher end of the existing range. We are trying to really give clarity to our investor base that we will continue to this on a consistent basis until we get there. If there is a exogenous macroeconomic event, everybody sensible would take a pause and say, okay, who should we be managing this going forward. But that’s what we’d like to do, yes.

Thank you. The following question is from Peter Routledge of National Bank Financial. Please go ahead.

Just a question on trading revenue, equity trading revenue; I noticed in the sub-pack the TEB adjustment is part of the equities trading revenue line. But it's greater; the TEB adjustment is greater than the equities trading revenue, which I'm sort of curious as to why. And I guess if I look at non-TEB equities trading revenue, it's negative. So may I am making an overly simplistic equation there. I just wondered if you can give me a little more color on what's going on.

If you go back historically you’ll see that’s generally the case, and that’s because in our equities business when we do some of the TEB business it does have friction cost relating tothat. So that would be going against the TEB itself and the TEB revenue and that’s what would result in the difference that you’ve always spoken about.

Would that be negative spread revenue related to the synthetic equity arrangements?

No, it’s not negative spread revenue, but it’s just a certain savings that we pass on and certain other related friction costs relating directly to the transaction that we undertake.

And I guess maybe a question for Harry on those arrangements. What's the likelihood, or how worried are you that whatever comes out of the discussions with Ottawa disrupts the market and maybe produces an asymmetric loss that we don't see coming?

Hi Peter, we get this question a lot. Obviously we are working with our clients to better understand the uncertainties around the pending legislation. At this point in time there are just so many uncertainties that it would be too early to comment on market disruptions. But I would say just in general, liquidity has become a concern in markets, we must factor that in. But having said that I did make a comment earlier that some of these strategies may remain in a different form as well. So there’s just to many uncertainties to comment on potential market disruption at this point in time.

Victor I appreciate your comments on the Apple Watch app, and I think it reflects the innovation CIBC has had in the payments industry. But does that oblige CIBC to participate or support Apple Pay in Canada?

I think Peter we are obliged to do the following: our clients tell us that they want certain things. They want to make banking easy, flexible and convenient and anything that we can do to make life easier for our clients that will give us a competitive advantage, we will do. There are lots of payment ideas coming out, there are lots of peer-to-peer ideas come out. There are a lot of innovation happening in the financial space, and all I can tell you is philosophically CIBC is an organization that is really attuning to what our clients want and we want to advance our technology strategy very much in line with our client strategy.

So if the client wants a particular alliance partner in the payment space, that's what you'll give them?

Yeah, if only there’s enough scale there, so not every individual client. And the final thing I’d say is what’s really important in all of this and it’s always at the forefront of everything we look at is making sure that any innovation that we are focused on is safe and secure for our clients.

Right, and then David just on your partnership card strategy or maybe your card strategy more broadly. Is that really just a payment strategy or are you actually more focused on winning a greater share of your customers' credit needs?

Hi Peter actually there’s [inaudible] going on there and you are right, there is an element of strategy and also just client needs. Though some of the cards we’ve been focused on are kind of longer payback to the client so to speak, they are just deferred rewards like travel you have to build for some time before you actually have an event. And so what we are doing with some of these co-branded cards is to introduce cards that have a more immediate reward and fit more with the day-to-day lives of our clients. It’s pretty important to - fundamental part of the Canadian lifestyle and here is a way to have a reward rapidly after you’ve spent money. And smartphones, phones again the same thing, and that card fits the life for our clients, they looking trying to get their smartphones renewed cheaper, sooner through and other things they can get through Telus in the electronic space. So point one, yes there are cards that fit the lives of our clients by faster rewards. But there is also a payment strategy to this. So we are now building up a relationship bank with [inaudible] laws if you’d like to do banking in a store. We’ve got relationship with Tim Horton’s in the convenient space. We now have a Telco. You can see us sort of building up a bank of loyalty, such that in fullness of time if there is an opportunity for couponing or putting together something that we can offer to our clients a suite of relationships. These are all you’ll notice high-end partners that focus on client experience. But all of them are very much client oriented and very, very strong brand. So frankly nothing that definitive at this point, but just there is this element of those relationships and the fullness of time could have additional value.

The following question is from Meny Grauman of Cormark Securities. Please go ahead.

You've been very clear about your acquisition appetite and focus. But I'm wondering given the fact that you have been out in front in terms of technology, in terms of talking about the importance of technology and banking, I'm wondering what your appetite would be in terms of maybe making significant acquisitions or investments in FinTech companies and going down to Silicon Valley and going shopping there? Is there any contemplation of that as a potential use of excess capital?

Meny the first and most important thing we’ve focused on as a bank is safe, secure bank, good for clients, good for depositors, high quality of lending, high quality capital ratios. But we are highly attuned to what the evolutionary spaces in the technology landscape. We have been focused particularly on the payment space. We talked about that through some of the applications including the most recent Smartwatch application. David, may be you can comment on this because we’ve been particularly active in the retail space when it comes to the new technologies that are emerging.

I’d be happy to. Thanks for [inaudible]. I am down at Silicon Valley at [Fairmont] for our team members. So we are looking at what’s occurring down there and how we can best participate, and Victor outlined that there is a lot going on in this space, so we need to pick our spots be aware. But we’ll also be active. So, the Tim Horton’s card came up with a new technology, which is multi-button card. It’s an interesting card and has a lot of potential applications, and that particular case was rewards card, actually a prepaid card with one button and a credit card with another button. In that card in addition is an antenna because its tap and pay, a chip. So if you skin that card there’s a lot of technology in it. So we like that and we see other potential applications. So we actually did invest in the company that produces that card. So that was an example of not a huge investment, but what we did is invested in that company to help their growth and to frankly also ensure we had the exclusive rights to elements of what they can build in our key market places. So we are down there looking at what’s going on and as given evidenced with that manufacture of that card we will - we have invested.

And I think Meny just to reinforce that point, any investment that we do make as we did in that instance has to reinforce the value proposition of our core franchise. We are not going to be looking at creating a cornucopia of interesting FinTech investments. We are going to look at things that matter to our business and that will drive our business forward though its retail banking, business banking, wholesale banking and wealth management.

When it comes to those investments, is there a certain dollar value or some sort of quantum that you think about that, you don't feel comfortable crossing, or is it just open to opportunities?

I think it’s the opened opportunities smart, sensible, small is better.

The following question is from Doug Young of Desjardins Securities. Please go ahead.

Just on the CET 1 ratio, you are targeting 9.5% to 10.5%. So 10.5% seems to be above maybe where some of your competitors are targeting, and you've got obviously a very strong ratio. I'm wondering your thought process is there a reason why you would need to have a stronger CET 1 versus your peers? And is there something that you're at all concerned about, such as risk-weighted floors, and any model refinements that are on the horizon that we should be thinking about?

Doug let me just start off here and then I will pass it on to Laura and Kevin if they want to kind of reinforce a couple of comments. As I said, it’s only slightly above our range. Core to our strategy is being strong bank financially, but very comfortable where we are. If I look around globally what happening in banking today, CET 1 is above 10% or in norm, they are not the abnorm, there’s a norm. So that’s what we are focused on going forward. And if we start getting higher, if we start to think about what else do we need to do to deploy capital either in our business by investing or by returning capital to our shareholders. We’ll evaluate that when we get to that point. Now from a risk [weighting] standpoint or any other concerns Laura do you want to just comment on that?

Sure. Doug we don’t have any - well don’t foresee any big model changes that will impact significantly risk weighted assets. We just have normal course stuff as that goes through. And as for [floors] you know we already do have the Basel 1 standardized traditional floor. There is some consultation process underway with the Basel committee, not expecting to hear anything on that until the end of 2015. So really too early to tell what the impact to risk rated assets could be, as it relates to that.

So it doesn't seem like there's anything else that's behind this? It's just your core to your strategy is a strong capital ratio, but there's nothing that's potentially going to impact that down in the next six months that you foresee?

That’s right, nothing that we foresee.

And then Victor just quickly I think on the acquisition side, I think before, correct me if I'm wrong, you were looking at 1 billion to 2 billion. Now I think you talked 2 billion, maybe 3 billion. Is that a change and are you finding that to get businesses that would fit in the US private banking or asset management space you're having to go better than what you otherwise thought?

Not necessarily, I think it’s important to let our shareholders know that the patience and discipline aspect is the most important thing for us. So as we look at our business, with our new leadership team, we look at uncovering value on our existing business and unlocking growth on our business, and we think that’s a good way to deliver value. It’s a good way to kind of build up our balance sheet, make a strong bank, deliver strong earnings for our dividends. But at the same time, we are highly engaged on interesting companies that would contribute to CIBC’s growth. But to say here, I want to emphasize more than range is patience around valuation and discipline.

The following question is from Sumit Malhotra of Scotiabank. Please go ahead.

First question is on credit quality, and it's probably for Dave and Geoff. You mentioned that while oil prices have rebounded somewhat there's still somewhat of a threat level to the credit quality or the health of the economy for the Bank. And when you think about the energy backdrop, clearly there's been a very large level of issuance on the producer side in the past few months. I think that's calmed the market down in so far as that portion of the book is concerned. So maybe for the two of you, when you think about credit quality and the threat from energy, has in your mind shifted almost exclusively to consumers as the impact of CapEx cut plays out or is there still some concern in the producer portfolio as well?

Sumit its Laura, so why don’t I may be kick it off and then I’ll leave Geoff and David to sort of weigh in. So we have as it relates to our commercial corporate lending portfolio, we have had some downgrades in the portfolio, but those are really expected. I’d say we’ve had minimum movement in our watch list accounts, and as I mentioned earlier our drawn balance is actually decreased somewhat. So apart from the increase in growth impaired loans and that provision not related to the one name we spoke of even last quarter that was experiencing some difficulty prior to the drop in oil prices. Overall our portfolio is actually performing very well, and I’d say its performing as expected. So we are not seeing anything that is worrisome. We are actually seeing our clients that are being very proactive in terms of how they are managing their affairs and so we remain quite comfortable in the commercial corporate space. And then if we look over to the retail side, notwithstanding some of the stuff we are seeing in the macro environment or that you’ve been reading in the press out west where we are seeing higher unemployment claims and insolvency claims, I think in Alberta. We are not seeing this in our portfolios at this time, no consistent trends that would indicate stress in our retail portfolio. Now that said, it still is early days, but when we look at our credit fundamentals, when we look at our delinquency rates, our Beacon score risk ratings, they are all quite solid.

What I could add to that Sumit if it’s part of the game, we’ve just come through a boring base redetermination season. I’d say that was a successful program, so we’ve been working with our clients on both sides of the border. They’ve been very proactive they’ve been cutting dividend, they’ve been cutting CapEx, they’ve been taking the steps they need to take and we’ve been supporting them as a bank. So I’d say it’s been encouraging and we’ve seen a rebound a little bit in energy prices of the high 50s, that’s given people a little bit of a breather here, but we are still staying very watchful in the event that energy prices take another dip. So I’d say at this point the results are encouraging, the client response is encouraging, but we are staying vigilant.

Hi Sumit, from my perspective I don’t think there’s any new data that Laura and Geoff have covered in this follow-up question.

I do but it's going to be on a different topic, if I can. We'll move away from that and go back to Victor. Just back in terms of acquisitions and some of your commentary, I think you've been very clear in talking to the market on what form potential, not only targets but financing would take. And in the past, you've mentioned, if I have this right, that you would be reluctant to let the ratio fall below the low end of the range, which is at 9.5% and give yourself maybe a couple of quarters to let it build back. Does that still hold, and if so am I right in saying that you could probably do close to a $2 billion acquisition today and not issue any equity and still be at the low end of the range? Is that an appropriate way to think about it?

I think it is. You are asking your second question Sumit, as there’s a rule for one question. I will answer that one.

I would be at stretch to say this was part B to the part A, right?

Fair enough. I mean mathematically that would be correct, right. We’ve always said we don’t want to go below 9.5. I think the new world norm is 9.5 to 10. We think it’s 9.5 to 10.5 very candidly. So we operate in that range. And mathematically if you sort of take 10.8 and subtract 9.5, you get 1.3 and you can kind of do the math, 7 basis points of CET 1 is about a $100 million. So that is feasible. That’s not necessarily how we think about it. We think about the business holistically Sumit. I mean we think about our existing platform and how we can unlock the value. We think about how do we invest in that, we think about dividends, and we think about M&A and buybacks. Those are the four levers of the business. So I wouldn’t just sort of drive down at that mass and say, oh, you can do that. Yes you can technically, mathematically, but that’s not necessarily how we are thinking about it right now.

The final question is from Darko Mihelic of RBC Capital Markets. Please go ahead.

I have one question, but it's got a couple parts to it, and it's really for David, and maybe you can help me or refresh me on the FirstLine. What I'm getting at is you're sort of at your target already, you’ve got 17 billion left. That could potentially run off. So the question is do you still target 25% of what's left or are you still targeting 50%? But perhaps more importantly, and I'll get to really why I am asking this. I guess you've converted some of these FirstLine mortgages to core CIBC-branded mortgages, and what I'm curious about is the success rate of converting them to the core client. So switching them over, getting them to cross-sell, I guess, is one way to think of it. And ultimately I'm a little bit guilty of modeling your company with lower asset growth and lower revenue growth than peers. But it seems to me that you mentioned this for a reason that perhaps you are targeting stronger growth rates in maybe all of your loan categories and deposits categories, because of you being ahead of schedule on FirstLine. So I'm not trying to ask you entirely to size the upside from what's left in FirstLine and perhaps the switch-over from core, but can you give me an idea of what you're sort of targeting, and perhaps wrap it in for me in the sense that is cross-sell where you want it to be? Where can it go from here? And I'll stop talking now, and maybe throw the floor over to you.

Hi Darko, I understand where you’re going with that, so a couple of comments. My longer answer to the operating leverage question was in part because you are not the only one that’s modeling us with lower asset and revenue growth. And I guess part of what we are trying to say is, that’s not unreasonable given our history, but given our more current performance, that may be its’ time to relook at how we grow relative to our peer group. So that I guess is part of the message. There’s lots more for us to do, but I think we are in a different place than where we were just a few years ago and it’s not unreasonable for the perception of our business banking and retail banking operations to lag that a bit. But I guess we are trying to signal from a different spot now. FirstLine separate efforts to shut down that book, it was a $50 billion book and you’ve got it right, the reason being we couldn’t get to deeper relationships there and how we are trying to grow is through deeper relationships. So conversion was to get them in to CIBC and then build that relationship. So at the beginning we weren’t great at that. We weren’t smooth on the handoff in to our core operations but we adjusted fairly rapidly on that front, and now we are quite pleased with welcoming those FirstLine clients in to the CIBC family and building a deeper relationship. So that has gone well after a slower start in the first couple of quarters. So that is working, we are the primary strategic objective of the FirstLine shut down and building deeper relationships is working. As far as the third point you’ve got there. Yes we’ve hit the 12.5 billion that’s now been converted. There’s 16ish billion that are still available. We are now running at about 50% retention rate, have been for some time, in fact we are over that this quarter. So, the new target would be roughly about 20 billion that we’ll come across once this whole book is wound down over still a couple of year period of time for that to occur. But that would probably be the new reasonable target based on performance to date. I hope that gives you a little context.

Yeah and can you give any other metrics in terms of cross-sell or anything else to help me size the upside?

Not so much on the product use count. Again we’ve touched on this before, it’s tricky because in there we are including our product use count. Do people set up bill page, are they using our mobile? All these things that one wouldn’t consider a product per say. But when you look at the outcome we are trying to achieve, which is a sticky robust relationship, they are important determinants, they are too determining whether attrition levels are going to be what we’d like them to be. So that’s why to date we’ll have to think about what we do going forward. We haven’t gone forward with the product use count because it would be hard to compare to something else, and we’d have to be honest and say there’s things in there that you wouldn’t normally consider to be a product. But for us as we monitor our relationships with clients, they are quite important to cracking the nature of that relationship.

This concludes the question and answer session. I would like to turn the meeting back over to Mr. Weiss.

Thank you, Operator. It’s 9:30 so that concludes our call, and if there are any follow-up questions, please contact our investor relations department, and thanks again for joining us this morning.