John Aiken

John Aiken inquired about the dynamics behind the degradation observed in residential mortgages versus the stability in the HELOC portfolio, and whether incremental impairments in residential mortgages would subsequently impact the HELOC portfolio.

Answer

Chief Risk Officer Ajai Bambawale explained that while there's some uptick in residential mortgage impairments from 2022-2024 vintages originated at higher rates, the overall Canadian housing portfolio, including HELOCs, remains strong with stable delinquencies and low charge-offs across both asset classes.

John Aiken from Jefferies Financial Group inquired about the timeline for the U.S. loan portfolio, asking when an inflection point from contraction to growth could be expected following the balance sheet restructuring.

Answer

Leo Salom, Group Head - U.S. Retail and President & CEO - TD Bank, America's Most Convenient Bank, clarified that with an additional $18 billion in runoff identified, headline loan balances would likely contract through most of 2026, with an inflection point toward the end of that year. He noted strong underlying growth continues in core areas like bank cards and home equity.

John Aiken from Jefferies asked for clarification on the timeline for U.S. loan balance growth, seeking to understand when an inflection point might occur following the ongoing balance sheet restructuring.

Answer

Leo Salom, Group Head - U.S. Retail and President & CEO of TD Bank, America's Most Convenient Bank, explained that with an additional $18 billion in loans identified for runoff, headline contraction is expected through most of 2026, with an inflection point toward the end of that year. He highlighted that core areas like bank cards and home equity are already showing strong growth.

John Aiken of Jefferies sought clarification on the plan to redeploy capital from the U.S. point-of-sale business exit and requested a segment breakdown for the announced restructuring charge.

Answer

CEO Raymond Chun clarified that capital from the ~$3 billion third-party retail card services wind-down will be reinvested into TD's proprietary credit card business. CFO Kelvin Tran explained that the restructuring charge is broad-based across the bank and will not be broken down by segment, with savings driven by workforce, real estate, and asset optimizations.

John Aiken asked for clarification on whether TD would lose its board representation and cease using the equity method of accounting for its Schwab investment if the stake were to fall below 10%, and if the sale impacts the sweep accounts agreement.

Answer

CEO Bharat Masrani stated that the bank's current intention is not to reduce its Schwab stake further, viewing it as a strategic investment. He also confirmed that the sale has no bearing on the existing sweep account agreement.

John Aiken inquired about BMO Financial Group's comfort level in potentially dropping its CET1 ratio below 13% before its peer group, given its stated preference for a 12.5% target.

Answer

Tayfun Tuzun, Chief Financial Officer of BMO Financial Group, explained that the bank's 12.5% management target for the CET1 ratio considers regulatory minimums, the macroeconomic backdrop, and peer group distribution. He affirmed BMO's comfort with this target as a sound approach to capital management.

John Aiken of Jefferies Financial Group Inc. asked for details on the increase in impaired loan formations in Canadian commercial real estate, specifically whether it was caused by a single credit or multiple, and if there was a regional concentration.

Answer

Chief Risk Officer Piyush Agrawal clarified that the uptick was driven by one idiosyncratic file involving a single developer with a combination of projects. He noted that the projects are diversified and not concentrated in a specific region.

John Aiken inquired about the U.S. balance sheet restructuring, asking if BMO could quantify other potential optimization opportunities beyond the recent credit card portfolio sale.

Answer

CFO Tayfun Tuzun confirmed BMO has an ambitious plan to improve ROE by evaluating the entire balance sheet. While declining to share specific details, he stated it is 'reasonable to assume' that more strategic decisions and announcements will be made to achieve the bank's targets.

John Aiken of Jefferies Financial Group asked for quantification of future opportunities for U.S. balance sheet restructuring, beyond the recent credit card portfolio sale, and whether to expect periodic announcements.

Answer

CFO Tayfun Tuzun stated that while he had no specific news to share, the bank has an ambitious plan to improve its ROE, which involves looking at the entirety of the balance sheet. He confirmed it is reasonable for investors to assume more strategic decisions will be made and announced along the way to achieve their ROE targets.

John Aiken asked about the delayed revenue synergies from the Bank of the West acquisition, questioning if original targets are still achievable and what the new timeline is.

Answer

CEO Darryl White confirmed original targets remain achievable, attributing the delay to a muted U.S. banking environment. Head of North American P&B Banking Erminia Johannson and Head of Commercial Banking Nadim Hirji provided examples of strong underlying progress, including core deposit growth, rising branch productivity in new markets, and robust new client acquisition, positioning the bank to capitalize on an eventual market recovery.

John Aiken from Jefferies inquired about CIBC's expense outlook, specifically asking if certain segments are expected to have greater or lesser operating leverage in fiscal 2026, and whether technology spend is accelerating, leveling off, or remaining consistent.

Answer

Rob Sedran, CFO, stated that while positive operating leverage is targeted for all businesses, Capital Markets might find it harder to achieve in 2026 due to its strong performance in the current year. He emphasized managing operating leverage at the all-bank level. Regarding technology spend, Rob Sedran indicated that it is expected to continue to grow, driven by investments in AI and reshaping the workforce, with a focus on smart and purposeful allocation.

John Aiken from Jefferies Financial Group Inc. asked about the sustainability of CIBC's strong operating leverage, questioning where the bank stands in its cost-cutting initiatives and how replicable the recent performance is.

Answer

Robert Sedran, Senior EVP & CFO, characterized the bank's efficiency efforts as an 'always on' approach rather than a program with an expiration date. Victor Dodig, President & CEO, added that the next wave of efficiency will be driven by data and AI, building on a decade of foundational technology transformation.

Asked about the sustainability of strong operating leverage, the progress of ongoing cost-cutting initiatives, and the future outlook for expense management.

Answer

Executives described their efficiency strategy as a continuous, 'always-on' approach rather than a finite program. They expect to continue delivering annual operating leverage, with future gains driven by technology transformation, data, and AI.

John Aiken asked about the sustainability of CIBC's strong operating leverage, questioning how much momentum remains from past cost-cutting initiatives and how replicable the current performance is moving forward.

Answer

Robert Sedran, Chief Financial Officer, described the bank's efficiency strategy as an 'always-on' approach without an expiration date, stating they plan for annual operating leverage. Victor Dodig, President and CEO, added that future efficiencies will be driven by leveraging data and artificial intelligence, building upon a decade of foundational technology transformation.

John Aiken from Jefferies questioned the sustainability of CIBC's strong operating leverage, asking about the progress on past cost-cutting initiatives and the outlook for future efficiency gains.

Answer

CFO Robert Sedran described the bank's efficiency strategy as an "always-on" approach rather than a program with an end date. CEO Victor Dodig added that future efficiencies will be driven by investments in data and artificial intelligence, building on a decade of foundational transformation.

John Aiken sought clarification on the U.S. commercial real estate portfolio, asking about expected inflows to the watch list and whether recent loan dispositions resulted in gains or losses.

Answer

Chief Risk Officer Frank Guse clarified that while the worst is past for U.S. office CRE, some new stress could still emerge, but he does not expect a repeat of previous large losses. He noted the dispositions involved some 'gives and takes' but included some reversals that contributed positively to the U.S. segment's strong results this quarter.

John Aiken asked for clarification on the domestic retail formations and the 90-day plus delinquency impact observed in the quarter, specifically whether these trends indicated seasonality or underlying systemic weakness. He also inquired if the strong commercial performance domestically in the quarter could be taken as a positive indicator for a potential rebound in that segment.

Answer

Phil Thomas (Chief Risk Officer) attributed the increase in gross impaired loans (GILs) in Canada primarily to mortgages in the GTA, emphasizing that the overall trend was not systemic, with strong FICO scores (around 790) and low loan-to-value (LTV) ratios (low 60s) for delinquent mortgages. He expressed confidence that GILs would normalize in the latter half of 2026. Regarding commercial performance, Phil Thomas was pleased to see commercial GILs and PCLs normalize, crediting the bank's resilience and lending quality standards, and anticipated the commercial space to remain flat to current levels in 2026.

John Aiken from Jefferies Financial Group asked for specifics on the negative credit migration in international commercial, and questioned the drivers behind the improvement in domestic 90-day past-due credit cards.

Answer

Phil Thomas, Group Head & Chief Risk Officer, clarified that the weakness in international commercial is concentrated in Mexico due to local market dynamics, not broader trade issues. Regarding Canadian credit cards, he attributed the improvement to disciplined originations and enhanced collections effectiveness, while noting consumer health remains mixed with stress evident in younger demographics.

John Aiken asked how the softer economic outlook would influence the pace and aggressiveness of the newly announced share buyback program. He also inquired about any early lessons learned or potential synergies from the strategic investment in KeyCorp.

Answer

President and CEO Scott Thomson confirmed the economic outlook will determine the pace and magnitude of the buyback, but emphasized the bank has significant capacity, with a CET1 ratio of 13.2% versus a comfortable operating level of 12.5%. Regarding KeyCorp, he noted its NII growth is contributing positively and that the changing U.S. regulatory environment is creating tailwinds for the banking sector, which will benefit both KeyCorp and Scotiabank.

John Aiken asked how the economic outlook would impact the execution of the new share buyback program and inquired about any early learnings or potential synergies from the strategic investment in KeyCorp.

Answer

Scott Thomson, President & CEO, stated that while the economic outlook will influence the pace of the buyback, the bank has significant capacity to repurchase shares given its strong capital position and depressed valuation. Regarding KeyCorp, he noted its positive earnings contribution and suggested that the evolving U.S. regulatory environment could create tailwinds for the entire North American banking sector, benefiting both KeyCorp and Scotiabank.

John Aiken asked about the sustainability of the strong performance and improved productivity ratio in Global Banking and Markets (GBM), and inquired about the strength of the advisory pipeline.

Answer

Travis MacHen from Global Banking and Markets expects revenues to normalize from near-record levels, which would cause the productivity ratio to move higher. CFO Rajagopal Viswanathan suggested a normal earnings run-rate for GBM is $425M-$450M. Regarding the pipeline, Mr. MacHen described it as 'incredibly strong' despite market headwinds, a point reinforced by CEO L. Thomson who highlighted top-tier league table rankings.

John Aiken inquired about Manulife's new joint venture in India, asking for details on product offerings, Manulife's competitive advantages, and the expected timeline for regulatory approval and operational launch.

Answer

Phil Witherington, President and CEO of Manulife Financial Corporation, highlighted favorable market conditions in India and a strong partnership with Mahindra. He noted Manulife brings global insurance expertise in product development and risk management, expecting the operation to launch in 12-18 months, including regulatory approvals.

John Aiken inquired about Manulife's newly announced India joint venture, seeking details on potential product offerings, Manulife's strategic contributions to the competitive market, and the anticipated timeline for regulatory approval and operational launch.

Answer

Phil Witherington, President and CEO, explained that the India market entry is timely due to favorable regulatory and digital environments, consistent economic growth, and increased wealth. He highlighted Mahindra as a strong partner with local knowledge and distribution. Manulife brings global insurance expertise, including product development and risk management. He estimated 12-18 months for the operation to be up and running, including regulatory approvals.

John Aiken of Jefferies Financial Group inquired about Manulife's future M&A strategy for its Global Wealth and Asset Management (GWAM) division following the Comvest acquisition, and sought clarification on the financial impact of the upcoming Hong Kong eMPF platform transition.

Answer

Paul Lorentz, President and CEO of Global Wealth & Asset Management, explained that while the primary focus is on organic growth, the company remains open to strategic acquisitions that can accelerate growth, similar to the Comvest deal. Colin Simpson, CFO, clarified that the anticipated impact from the eMPF transition would be approximately US$25 million per quarter.

John Aiken from Barclays asked about the outlook for Manulife's strong Asia sales momentum for the remainder of 2025.

Answer

Incoming CEO Philip Witherington responded that while the current sales run rate feels good, driven by strong demand for savings solutions, he expects the growth rate to normalize to more typical levels through 2025 due to tougher year-over-year comparisons. He noted that while he remains cautiously optimistic, macroeconomic uncertainty could impact consumer sentiment and lead to deferred buying decisions.

John Aiken from Jefferies asked about the potential impact of the announced CEO succession at DBS on Manulife's strategic partnership and whether Manulife has a relationship with the incoming CEO.

Answer

President and CEO Roy Gori expressed confidence that the leadership change at DBS will not impact their deep partnership. He highlighted that the relationship extends beyond the outgoing CEO, noting that the incoming CEO, Su Shan, was a key figure in signing the original bancassurance agreement in 2017.

John Aiken requested an update on the progress at City National Bank, asking about its current status and the remaining levers for future profitability expansion.

Answer

President & CEO David McKay stated that he is extremely happy with the progress at City National, highlighting strong earnings despite significant ongoing remediation investments. He noted the bank is now actively recruiting and adding clients. CFO Katherine Gibson added that remediation-related costs are expected to decline on an absolute basis through 2026.

John Aiken of Barclays inquired about the quarterly performance of City National Bank, seeking an update on its operational improvements and profitability outlook for the remainder of the year.

Answer

President and CEO David McKay responded, highlighting 'very good progress' in the City National franchise. He noted momentum in building the client base by transitioning from single-service to multi-product clients and enhancing cross-selling into Wealth Management. McKay confirmed that the replatforming and regulatory remediation are proceeding on schedule, and he anticipates improved loan growth as client runoff slows.

John Aiken requested an update on the HSBC Canada integration, asking for specific metrics on cross-selling, customer attrition, and revenue synergies relative to the bank's initial expectations.

Answer

Neil McLaughlin, Group Head of Personal and Commercial Banking, responded that client attrition is well within original estimates and engagement is high. He outlined three buckets of revenue synergies: cross-selling RBC products to HSBC clients (e.g., over $100M in AUM moved to wealth management), selling new HSBC-derived products to RBC's client base (e.g., 7,000 foreign currency accounts sold), and rebuilding origination pipelines from the legacy HSBC salesforce.

John Aiken from Jefferies Financial Group inquired about the defensibility of margins in the Asia business amid strong growth and asked for details on the strategic rationale for the increased investment in Bowtie.

Answer

President - Asia Manjit Singh expressed confidence in continued growth and results across Asia's eight markets, driven by strategic investments and execution. He explained that the Bowtie partnership provides a direct-to-consumer digital insurance model in Hong Kong that complements Sun Life's existing distribution channels.

John Aiken from Jefferies Financial Group questioned the defensibility of margins in the Asia business amid strong growth and asked for details on the strategic value of the Bowtie investment beyond capital.

Answer

President - Asia Manjit Singh expressed confidence in maintaining margins due to strategic investments and strong execution across diverse markets. He explained that Bowtie, a digital direct-to-consumer insurer in Hong Kong, complements Sun Life's existing distribution forces and enhances its digital capabilities.

John Aiken requested more detail on the performance in Asia, specifically asking about the contribution from joint ventures during the quarter and the sustainability of the region's strong sales levels and new business CSM generation.

Answer

Manjit Singh, President of Sun Life Asia, expressed confidence in the ability to continue generating strong sales growth, underpinned by presence in growing markets, broadened distribution capabilities, and digital investments. He noted that while quarter-to-quarter volatility is expected, the strong sales growth supports the new business CSM generation, and he remains optimistic about achieving mid-teens CSM growth over the medium term.