Okay, great. So we can start with our next session. I have with me Victor Dodig from CIBC, the CEO. Welcome to the stage, Victor.
Thanks, Darko. Nice to see everybody. Happy New Year.
So, Victor, we've been having a similar discussion with all the CEOs all morning long, so no sense in changing it now. Let's, we'll dive into some questions in the macro. And I, you know, we've heard some variety of answers around this, so I'm very interested in hearing how you view it, starting off with the interest rate expectations and how they've changed so rapidly. And, in your case, I'd really love to sort of dive into your views on rate outlook, net interest margins, net interest income growth for 2024.
Sure. Well, I'm sure you've heard from others on rate outlooks. It's all really, a guessing game other than looking at the forward curves. I don't know if many people would have predicted that the rates would be where they are today, where the U.S. 10-year today, I'm not so sure you would have gotten, much of our audience saying it'd be at 400 basis points. So we look at the forward curves. We assume the central banks are going to be mindful of where inflation is and likely see 2-3 cuts this year, starting in May, June, on both sides of the border. In terms of our own, positioning, and this is something that we mentioned to you last year, it's our work on improving our, our margin profile.
Under that type of a scenario, we would see our margins improve in the mid-single digits range, you know, more so to the back half of fiscal 2024. So that's it in a nutshell.
So that's the margin side of it. What about the loan growth expectations? What should we think about here?
I think on the growth-
We've had some varying degrees of views on loan growth.
Yeah, I think on the consumer side, you're seeing low single-digit loan growth at present. That could adjust as rates adjust, and the housing market might see an uptick in the spring. In the Canadian commercial and corporate sector, you're seeing sort of mid-single digit loan growth expectations, at least as far as we can see. In the U.S., we'd see in the mid-single to mid-high single digit loan growth in the U.S., and that's just a function of what we see happening in the regional bank landscape, pulling back and presenting opportunities for us.
Are they pulling back equally across all sort of sectors, or are there some sectors?
I think it depends by institution, but we would kind of just focus on the sectors that we're focused on, and we're seeing growth among our, you know, within our existing clients, as well as with the new clients, largely because of, you know, institutional-level episodic growth slowing down at certain regional banks.
Okay, great. Now, the other angle of falling interest rates has been really a market sort of lack of concern, I would say, with respect to the mortgage renewal issue. And, you know, CIBC, for all intents and purposes, I thought your disclosure was one of the best amongst the Big Six in terms of disclosing everything from the renewal profile to the level of shock. And now that rates are falling, is anything changing in your mindset? Does anything change for you? What do you do? Do you maybe press harder on the gas with mortgage growth? Is this an opportunity for you? How should we view this for CIBC?
I think, you should always look at, the growth at CIBC, and this is one of the themes I really want to emphasize to you, as we share more and more data about our focus on the depth and quality of the client relationship. So we're gonna look at mortgage growth and keeping up with market growth, but we're much more focused on the types of clients that we want to build relationships with, rather than the sort of growth, broadly speaking. Okay, so the mass affluent client strategy, which I hope we can touch on today, some of the core clients that we're attracting and the mortgage growth there being profitable mortgage growth, a depth of client relationship that we can see being an enduring client relationship, being the hallmark of our strategy going forward.
In terms of what we're seeing on the mortgage side, clients are reacting. They're taking action because we're helping them take action on the variable rate piece. We reduced our negative amortizing mortgage amount, you know, by a good amount over the last little while by taking proactive actions and working with our clients. Clients who are renewing are renewing in the two-and-three-year fixed zone in anticipation of a rate decrease, and clients that are managing through the rate increases and the monthly payment shock that comes with it. So it could be CAD 300, it could be CAD 500, it could be CAD 700 a month, depending on the client and depending on the situation, which equates to CAD 4,000-CAD 8,000 per year in additional mortgage payments. And what we're seeing is clients adjusting their own discretionary spending.
They have excess deposits relative to where they were pre-COVID. What I always like to remind everyone on, about, is that clients do the calculation of keeping their home, even though mortgage payments would increase on a monthly basis, because the frictional costs of moving out of your home are not inconsequential. They are order of magnitude larger than the mortgage payment increases themselves. That would include real estate commissions, land transfer taxes, moving costs, et cetera, on a million-dollar home. It could be in the CAD 50,000-CAD 60,000 range. So that goes into their calculus.
Okay, great. And maybe just while we're sort of on the topic of the rate expectations, so we've touched on NIM, NII growth, we've touched on the mortgage side. Is there anything else we should think about that might benefit or not benefit with a reducing sort of interest rate profile?
Well, look, if you have a rapid reduction in interest rates that go well beyond the consensus today, that will affect NIMs
Yeah
- negatively. That would also be a signal that there's some broader softness in the economy, that would be concerning. So I think what the consensus reflects is, what I think what most of us would agree to is a, a constructive outcome for the economy after the rate shock that we've seen over the past 18 months. So that would be the downside, as I'd see it.
Switching gears to talk about capital a little bit.
Yeah.
So last year at this conference, we were surprised by a DSB increase, and you did it again in the summer, and here we are today, no increase in December. Your ratio's high, and looking for a net benefit in Q1.
Yeah. So, you know, we've been working... And you'll recall last year, we did talk about building our capital position in light of the regulatory changes. We were confident that we could do that. We did that through an organic capital generation. We did that through a DRIP that we put in place. We did that through a Strategic Risk Transfer. And, as we announced in the fourth quarter, our regulators approved our, U.S. business moving to an AIRB framework. And that, in addition to all the other changes that come in the first quarter, will put us at just north of 12.5 on a pro forma basis. So we're very encouraged by that. As we think about capital, we think about what is the regulatory, outlook look like? What does the economic outlook look like? Where are our peers?
When you add all of that up, operating in the 12.5% zone is the right level to operate at. 12.5 being the upper level of that. That's a 50-100 basis point buffer, depending on where the DSB is. It's 100 to today's DSB. We look at the DRIP that we have in place today. It's on the radar screen in terms of, is there an opportunity to move that decision forward to shut that DRIP discount off? And that's an opportunity for us as well. And again, we look at the economic environment, we look at where our peers are as we think through that.
So as I think that through that answer, I think to myself, my model says, "Well, you could be at 12.7 end of Q1 if things go right, and maybe even higher by the end of Q2." So even if the regulator were to go 50 basis points in June to the upper end, it still feels like you'll have plenty of space. So could you not see a situation where you could shut off the DRIP by-
I could see us reflecting on that in that, in that quarter, in that second quarter. Yep.
Yeah. Okay.
Yeah.
All right.
But it'd be something, again, that we reflect on in the context of the overall environment.
Sure.
Right? It's important to note that in 12 months' time, we've gone from a world where everybody wanted our banks to have more and more capital, to now fine-tuning it to 12, to 12.25, to 12.5, to 12.7. You know, we are all too conscious of where our peers are, the capital that we need for growth, and the economic environment that we're operating in. Well, as I said, the ability to move that decision forward on the drip discount is something that may provide an opportunity for us in the second quarter.
And so that's a near-term construct, and we're all sort of focused on it. But I think what I've learned, what I'm sort of sensing is globally, we're just heading for higher capital. And we, you know, some of the stuff still hasn't completely finished hitting. We've got output floors rising, potential for further regulatory action. And I, as I think of over time and think about other things that, you know, maybe there's gonna be higher mortgage lending RWAs, maybe there's higher liquidity requirements coming, maybe one day even a further increase. So do you see it that way? Do you see the longer term pressure on capital? And do you think that there is a potential where we enter a world where you have to carry longer term, more capital?
What do you think about your longer term sort of ROE goal?
Oh, look, we take our cues from our regulator, right? So our regulator's been quite clear, and I think in their decision in December, they emphasized that the buffer is there. It's a countercyclical buffer. They saw no need to change it. If the economy turns around, you know, proves to be much more resilient, you may see that go up, and therefore, we have to be prepared for that. If the economy turns out to be softer, you may see the buffer get lowered, because that's the way it's supposed to work. And your question as to all of these other decisions, I think many of the decisions on regulatory buffers and capital consequences are pretty well reflected in the decisions that have been made so far, and I don't anticipate more in that regard.
I don't think that there's a trend to reduce capital. If anything, there is a trend to increase it, but I think a series of actions have been taken so far. They've been pretty clear on how the buffers work, and I think we're all pretty clear on that, in my mind. Are you?
To be discussed.
Okay.
I think there's always a chance. I always have my concerns, but yeah, let's see.
Like policymakers, whether they're, at the government level, in terms of policymakers or at the regulatory level, in terms of policymakers, are all too conscious of the role that banks play in economic growth, and buffers play a role in that economic growth model. It's important to maintain the safety and stability of institutions, but it's also important to make sure that the institutions are competitive at a global level and can help the economy grow.
Fair enough. I think maybe just to finish on it, though, I mean, just as a thought sort of always creeps into my mind when we talk about capital is, I mean, you're generating a good amount of capital.
We are.
And so inevitably this will lead to, "Hey, what are you gonna do with the capital on the other side, where you've got lots of it?" And there's a lot of different options and availabilities, and maybe we can talk a little bit about weaving this into sort of your longer term kind of view on inorganic deployment of capital. And I know we've got lots of things to talk about today. We've got some - a little bit of time, but maybe you can give us a bit of a reminder here of your sort of priority of how to use your... When you get to that stage of high capital, which I think is gonna happen soon, Victor.
You're looking at me smiling, but I think it's gonna happen by end of year. We could easily see you well above 13%, Common Equity Tier 1 if things go well.
Yeah.
The question is: What do you do with the excess capital?
Well, we, you know, dividends, once a year announced-
Yep.
Be in the 40%-50% payout ratio. We've already announced ours for this year. The second piece would be, you know, how do we think about the DRIP?
Yep.
The third piece would be: How do we think about deploying capital for organic growth? I mean, if the economy proves to be much more resilient, and we see the demand for loan growth improve versus that low consumer growth or mid-digit commercial and corporate growth that I alluded to earlier, then you deploy it to growth with your clients. And you're looking for the question, you know, are you gonna do anything inorganically? And we'll talk about our strategy being highly focused on organic growth, being the primary driver of return, of ROE enhancement, of operating leverage, and that's what we're really focused on as a leadership team.
Now, on operating leverage, I mean, one of the things that we've seen with respect to many of your peers and was a little bit more of an aggressive move on restructuring at year-end.
Mm-hmm.
you seem to be a little bit ahead of the game on that, and, I think therefore, when I talk to investors, because the other banks seemingly have taken what we would call aggressive moves in Q4 and Q3-
Yeah.
There's a view that maybe on a relative basis, it'll be a little more difficult for you to show as much expense control as some of the others. So maybe, can you just talk about what you have sort of in place for expense control going into 2024, and the setup for a longer-term expense growth? You know, you're mentioning mid-single digit. Is there an environment where you would have to get more aggressive with employee reductions? Or maybe you can just offer how you plan to sort of manage through a difficult environment and manage down expenses without the use of big, aggressive restructuring charges?
Great. Good question. Again, if you reflect back on last year and sitting in this room and talking about where we were on expense growth, we were approaching double digits as a bank. And we said quite clearly that we have a plan in place to get to mid-single digits. We said quite clearly that the double digit, near double-digit investment was not just purely expense growth, it was investment growth in our technology, in our ability to scale, in our ability to get productivity improvements. And we've delivered on that. Going forward in the year ahead, our goal is to continue to deliver that. Being in that mid-single digit, low mid-single digit range, sort of in the 4%-5% range, ideally, is sort of what we think about as a leadership team.
Embedded within that is an annual 1%-2% productivity improvement from the technology investments that we've made. As investors, you want to get, you know, you want to be reassured that the investments that we made are meant to provide scale, are meant to provide those productivity improvements, and we're delivering on that in the context of this year. We have been mindful about how we reduce our headcount, how we offer reskilling opportunities to our employees. We have done that all in the ordinary course of business rather than through restructuring charges.
Our goal is to pretty consistently, and that'll depend on where revenues are from quarter to quarter, deliver positive operating leverage, because CIBC has gone through that investment mode, where now we're looking to get scale and looking to take our strategy on client focus, and I'm gonna elaborate on that, and how we believe that that focus, plus our expense discipline, plus the investments that we've made in technology, plus our focus on productivity improvement, will deliver that positive operating leverage.
I never hear banks talk about the branch network. Is that not something that's a potential source of further cost saves or change? Is that something that's ever on your mind?
Sure. Well, I mean, you know, if you look at the last two to three decades, there has been a shrinkage in the branch network, I think, across all the Canadian banks. Consumers are taking self-serve transactions, by definition, and conducting them on their own, right? Whether they're through the ATM, through a mobile phone, through online banking, and we're seeing that move. They're kind of marching toward the 95%-96% zone over time. So transactions are coming out of the banking centers. The changes that we've made to our footprint and that we envision making to our footprint, are to shift more of our branches, our banking centers to advice to a community model. So a community model has a transaction hub, but the spokes are advice centers, and there may be some, you know, repurposing of some of the branch footprint.
But branches, banking centers, will be an important point for our relationship managers and our clients to interact on advice, while clients take the self-serve transactions, to do that on their own.
So, picking up on that point there and trying to tie this back, I mean, one of the nice things is we had an Investor Day, and one of your key kind of messages, which resonated with me because I've been following CIBC for a very long time, and one of the things that you talked about is the desire to grow the mass affluent. Mm-hmm? And you've just touched on some branch, but maybe you can give us a little more color on that, because in today's world, what I'm hearing is deposit competition, and maybe this rate environment is going to shift deposits back to investments and so on.
I'm thinking to myself, "Wow, all I'm hearing is lots of competition for that affluent investor." So maybe you can provide a little bit of color here as to how you see this evolving, put some meat on the bones for us for the strategy. And I know Jon Hountalas is now in charge of this, so I'm very interested in seeing what a new leadership take on that would be as well.
Well, I think, I think it's a good question, it's part of our core strategy. Remember, the CIBC strategy that we've articulated at Investor Day really has a couple of component parts. One is the mass affluent piece, two is continuing to attract clients broadly within retail banking. We call it the bifurcation of banking. Some people need advice, some people want to just come direct and deal with us directly. That over time, will migrate. The third piece is the connectivity within the bank, and the fourth piece is the simplification, which I alluded to when I talked about operating leverage and expenses. Let's focus on the affluent. We've been in the Imperial Service business for almost 25 years.
It continues to be a unique value proposition within the Canadian retail banking landscape, where you have a dedicated advisor and their team managing both sides of the relationship for a client, both sides of the balance sheet: credit, investment, and deposits. We have 1.3 million affluent clients served by 2,000 advisors. So that's already gives us the advantage of incumbency in terms of our business model. The second thing is we've been working hard on data. So we've been working hard within our existing client base and our data assets to identify those clients who have core banking relationships with us, but their investments, their capital light, their fee-based business lies elsewhere. We're looking to consolidate those. There's 2.2 million clients that we've identified in that segment.
We think we can convert 15% of them, 1 out of 6, 1 out of 7, to a deeper relationship. We have also undertaken a digital financial planning journey with our existing personal Imperial Service clients, where we've identified assets that sit outside of the bank, and we plan to use those data assets and those relationships to consolidate and deepen those relationships. Lower acquisition costs, clients that we know, needs that we know in the context of a plan. And we also have the Costco relationship. It's more than a year old now. We've invested significantly upfront to get that going. We're very pleased with where it's at. Costco is a great partner. They bring to our bank now over 2.5 million cardholders, the majority being affluent. Many of them don't bank with CIBC.
We've converted 100,000 of them to a deeper banking relationship, and we plan to convert more. I think the aggregation of all of that within our core Imperial Service offer is going to allow for growth, and it's going to allow for capital-light growth because it's not a credit-heavy client. We also have, within our wealth management businesses in both Canada and the United States, private wealth businesses are growing. We're expanding our footprint, our private banking footprint. Our flows are robust, and we plan to continue to grow, and I think the United States probably offers more of an opportunity in that regard. We could talk about that a little later, but I'm very encouraged by our focus on the affluent, our incumbency position, and the investments that we've made. We also are making technology investments.
Those data investments and how we're using AI to make our advisors more efficient is something that is also on the forefront in terms of how we manage the business. That should be ROE enhancing, right?
I'm busy jotting down a bunch of numbers.
Lots of notes. Okay.
So 2.2 million customers that don't have assets with CIBC.
That have more than 100,000-
More than 100,000-
dollars of investable assets outside of CIBC.
And 15% to be converted.
Could be. 15 is a good number to start with.
15 is a good number. And then you've got 2.5 million customers from Costco. You've converted 100,000. What's the target there to-
We don't really have a target that we've publicly disclosed, but there's an opportunity. Again, we work with them in a partnership, so as we deepen those relationships with them, the Costco overall, it allows us to do more with those clients.
So in a nutshell, this is a, this is a strategy that really centers around your existing customer base, which I think is 10 million strong?
It's about a little north of CAD 10 million.
North of 10 million. Not necessarily dependent upon competing for and bringing in the external client.
Right.
Okay.
Even though we are, we're doing that as well. The second piece of the strategy is personal clients, broadly speaking, because over one in three affluent clients at our bank started as a student in the mass affluent segment. So in the trailing twelve months, in the fourth quarter, we outlined the fact that we've attracted over 600,000 net new clients. From the data, we could see that would be at the top end of the market amongst our peer group. Those clients came through Simplii, our direct bank. Those clients came through our Costco credit card portfolio, and those clients are the lifeblood of the future.
Embedded within that client base of 650,000 are students and newcomers, where from the data that we can see, we'd be at the top end of the market as well in terms of students and newcomers. So that, I think, bodes well for the future. So there's a, there's a distinct focus on the mass affluent that is, I'd say, accelerated, rejuvenated, a level of excitement given the data focus that we have today on those clients, our advisor capabilities, our ability to grow those advisor capabilities and grow that advisor force, our ability to grow in that space, our ability to continue to attract clients to CIBC for the future as well as for today, and then the other two parts of our strategy.
So what's going to be the marker of success? Is it going to be deposit growth? Is it going to be AUM? Which one would you point me to?
I think it'll be a combination of the both, and I think it'll be dependent on the interest rate environment. As rates drop, I think you'll see more money move from term deposits back into equities and to managed money.
Okay.
If rates stay elevated, then you'll see clients continue to hunker down in the term deposit space.
Will you be willing to provide occasional updates on the customers you're converting, and-
Our goal is to, within the context of our strategy, share with our investors those key performance indicators and how we're progressing against all of them. Yeah.
Okay, great. Thank you. So, definitely wanted to touch on credit quality as well-
Mm-hmm.
Before we maybe grab some questions from the audience. But so, you know, your team sort of outlined guidance of mid-thirties, let's say, for 2024. You know, you did 30. I want to think about how you sort of... What sort of the parameters are around that guidance, because there was some credit—there, there was some CRE losses in 2023.
Mm-hmm.
There's an expectation of some more. So I just want to know if you can sort of paint a better picture of, of your, of your guidance that you provided and why we sort of barely moved the goalpost, so to speak, on-
Sure.
on credit losses.
So, again, the guidance that we provided with greater clarity as we went through last year was 30 basis points on impaired. That is the entire portfolio for our bank. If you back out the U.S. office component, we're in the low 20s. That's sort of in a nutshell, how FY 2023 ended up, 30 basis points. If you strip out offices, in the low 20s. As we look forward, we see a couple of things. One is the U.S. office space, you know, continues to be in a fluid environment. We're working through it. We're encouraged by the actions we took last year. You'll see some losses this year, but that's just as we work through it. I think we're at the earlier end than some of our peers, particularly down in the U.S.
You'll also see some migration on the consumer side, not on the mortgage front, but on the unsecured side and the credit side that are natural with unemployment increases and as the COVID money is burned off. And the aggregate of all of that gets us into the mid-30s.
So it almost sounds as though commercial real estate will be similar in size-
You know-
-in 2024 versus-
It may be similar, it may be better.
Okay.
We kind of looked at stress scenarios, but, you know, we kind of add it all together, including anything in the corporate and commercial space where we don't see very much. Relatively benign there. It's kind of in the mid-thirties.
Okay. Okay, great. Thank you. I'm going to turn now to sort of take a look at the questions that are popping up on the Slido. The first question that comes up is: Can you talk to us more about the CIBC credit risk transfer activities, and whether you expect to be doing more in the next 12-24 months? Why or why not?
It's not the hallmark of capital generation. Strategic risk transfers are a component part of it. We did one last year. We'll do it episodically, where we think it makes sense to contribute to capital strength, but it's not the core of what we do.
What is it that makes you decide one morning to do a risk transfer? What-
We look at the aggregate, sort of, capital or organic capital generation, where the economic environment is, where our peer group is, how we think about the DRIP, and we add all of that up and say: Where do we need to be? And I said to you earlier, we need to be in the 12.5 zone. You know, that could be a little lower than that, but 12.5 zone feels right today.
Okay.
You know?
So it's not a function of inbounds or anything like that, or maybe?
Sometimes it's a bit of a-
Yeah
... back and forth, but we've built... I think the notable thing is we've built that capability today. We didn't have that capability...
Okay
a year ago.
Okay, I want to stick with some of a few more strategic questions. So, I did want to touch on the U.S., because-
Mm-hmm
You know, we've had a change in leadership there, and there's, you know, there was obviously a lot of disruption last year, and so here we are, you know, survived it. Maybe there's some big capital changes coming for your, you know, in the U.S., and maybe some of your peers in the U.S. will be stuck with higher capital requirements. Maybe that levels the playing field, I don't know. So maybe you can touch a little bit on the U.S. strategy and sort of, you know, what we should expect from the U.S. business in 2024 and frankly, beyond that.
Yeah. So the Basel-related changes in the U.S. are affecting the larger financial institutions that may present opportunities for us. But I think it's important to note that we kind of went into the U.S. with a very clear strategy. We've delivered on that strategy. You know, we had a little bit of pain from the U.S. office space last year and a little bit this year, and that's, you know, we originated those loans at 60% loan-to-value. Nobody ever thought that COVID would have that devastating an impact on that specific segment, but it's less than 1% of our overall asset portfolio. As we think about the U.S., it's a very private economy strategy, where we bank business owners and we manage their wealth.
Our capital markets business, which has grown notably over the last six years, again, is replicating the model of how we do business in Canada. Stay close to the rest of our clients, whether they're north-south clients or clients within the United States, so that it's an integrated and connected business. I think the things that you should look for in terms of our U.S. business are as follows: One is we made significant investments in our infrastructure so that we can continue to grow organically. We've done that in the commercial bank, we've done that in wealth management, we've done that in our risk management capabilities. So organic growth is a real big focus for us. Within that organic growth profile, it's growing our wealth management business, which we've grown notably over the, you know, better part of a decade. We're now adding private bankers.
We're opening up new locations. We're improving our mobile capability. We're growing deposits. We're growing lending. We're deepening relationships. We're looking to develop deeper connectivity with our commercial banking client base. Today in Canada, we're, you know, one in three—almost one in three commercial banking clients, owners, have private banking with us. In the U.S., so currently, about 15% do private banking with us. There's a real opportunity to deepen that as well as expand it to new markets. The second piece of our U.S. strategy is to make sure that our commercial lending and deposit-taking activities are more focused on the diversified industries, less on institutional real estate as we go forward. So you should see that tilt take root over time, including this year.
A third piece is to continue to grow our capital markets business, staying highly connected with the rest of our franchise, and I think that will bode well for our U.S. business. I think we'll be the beneficiary. We've seen the disruption of last March in the U.S. financial landscape. There were some financial institutions that particularly benefited. I was proud of the fact that we were able to hold our own, our deposit base. We've got some innovation on the deposit side that are particularly targeted to private high net worth clients and to businesses, that will help our deposit franchise continue to grow, as well as grow our loan book and grow our wealth management book. So a more balanced business and a business that also looks to be ROE accretive to the overall bank.
Would you say that the prospects for growth in the U.S. business is faster than, equal to, or less than that of Canada?
Well, with all the stimulus that's in the U.S. today, the economy feels more robust than the Canadian economy. So that's why at the beginning of today's presentation, I, I did indicate that I think commercial lending growth in the United States is gonna be mid to higher single digits, where in Canada you're looking kind of at a mid-single-digit growth rate. And that, you know, that has the perspective of changing over time. There's an election, you know, but I don't think the stimulus goes away. I think the stimulus programs in the United States are part of what's driving the economy, and I think Canada, quite frankly, is benefiting from some of that.
Okay, so, we've reached the point in time where we're very near the end of our time together, and so I'm gonna turn the podium over to you or whatever, and just ask you for your key takeaways for shareholders and investors.
Well, as I said at the beginning, I appreciate your investment and interest in our bank and prospective investment in our bank. I was here last year where we talked about what we planned for the year ahead, and what was on your mind is: Can they grow capital? Can they generate capital? We did that. What was on your mind was: Can they generate a margin improvement over the course of this year, where we saw some deterioration in 2022? We said we could, and we did that. Can they take their expense levels and investment levels to something lower than close to single to double digits, and can they do it faster than others? We said we could, and we did that. As we look to the year ahead, we will continue to focus on capital strength.
We'll look at the DRIP and shutting off the discount, and we'll do that. It's on our radar screen. We'll make that decision at the right time. But capital strength is going to continue to be important, both to help our clients grow, to deal with any economic uncertainties that are out there, and to reassure you that CIBC has got a strong capital base. The second piece is, from what we can see in the current forward curves, we can see our margin improving again this coming year, more toward the back half of the year. And the third thing is, assuming, you know, we have a decent economic outcome, our expense growth of no more than mid-single digits is our goal. That's our goal. Can deliver positive operating leverage, and we plan to do that much more consistently.
And stick to the four pillars of our strategy of mass affluent, of attracting more personal clients to our bank, developing deeper connectivity within our bank, within our client base, continuing to improve on our efficiency so that we can grow earnings, so that we can improve ROE, and that we can reduce any discounts that are out there on our shares relative to our peer group. And, we as a leadership team are focused on that, and we as a leadership team will report back to you our progress on those strategic priorities, just like we do so with our board on a regular basis. So thank you. Thanks for having me today. We're a year older, but we're still here, which is kind of nice. Right?
Thanks very much.
Thank you.
Appreciate that.