Okay, welcome back. Our next presentation, we have Rob Sedran, CFO of CIBC from Canada. Welcome back, Rob.
Thank you. Great to be here. Thanks for having us.
Thanks. Let's just start off with the market conditions in Canada. Over the past year, the word resiliency has often been used to describe both the consumer and commercial segments in Canada. Can you talk to some of the factors that you think are driving this resiliency, and how do you foresee these trends heading over the next 12 months?
Yeah, it's interesting. The way you asked the question, it could almost be talking about the macro or it could be talking about our performance and the banking performance generally. I would say it's actually a good way to ask the question because it's tough to have a resilient economy without a strong financial system. It's tough to have a strong financial system without a resilient economy. We're feeding off of each other a little bit.
Starting with the macro picture, just generally, we've been in the trade spin cycle for the better part of two years now. But really, the effect of tariff rate hasn't changed meaningfully from where it was previously. You've seen generally that resilience on display in terms of the underlying enduring economic strength of Canada. Not everything is about exports, not everything is about trade.
You've seen relatively stable performance. The unemployment rate has hovered between 6.5% and 7%, and the economic picture has been generally stable with some optimism on the horizon, I think, also helping to sustain it. When you turn to our performance as a banking sector, part of it is just the execution of the strategy.
It's the compounding effect of deepening relationships and getting better and staying closer to what it is that we do. It's clearly been a constructive capital markets environment, which has also helped the wealth management business. When we look at our credit books, it's been resilient, is a good way to describe it. We've seen a bit of a drift higher in delinquency, a bit of a drift higher in loss rates, but nothing that is concerning, nothing that is systematic.
We expect more of the same as we look forward, both from an economic perspective and from an underlying performance perspective. Things are reasonably stable with that positive outlook on the horizon.
Great. Let's just dive a little deeper. You provided four strategic priorities you've previously identified. Growing the mass affluent and private wealth franchise, expanding digital-first banking, delivering connectivity and differentiation of clients, enabling, simplifying, and protecting the bank. Can you discuss the progress you've made to date towards achieving these objectives and goals for the coming year?
Yeah, thanks. We've been talking about our strategy in this manner now for a number of years, and we've been making the right investments in the right technology, the right people, and just pursuing that strategy consistently in each of our business units. When we think about that first one, mass affluent and just the private market, the private banking side, we've invested in tools like a digital CIBC GoalPlanner, invested in an eCRM that's allowed the client experience to really improve, and you're seeing it in our customer satisfaction scores.
As we have those deeper conversations with clients, we're seeing the results of that bear out in the results. So double-digit growth in funds under management. We're acquiring clients and growing the mass affluent franchise at a nice clip on a year-over-year basis, and the results are showing through.
We think there's a lot more still to do, even within just our own customer base, let alone customer acquisition and growing outside of our own customer base. We think just mining our own customer base for more of that opportunity is very much in front of us. We continue to make the investments and are quite pleased with the progress on that one. When you think about the digital side, it's very complementary to that mass affluent, right?
There's not customers that are strictly one or the other, but even there we've got our Simplii Financial where we are engaging in re-platforming the solution to provide our clients with a different channel that's still within our ecosystem. Investor's Edge, as an example, it's our direct brokerage. We have re-platformed it.
We're seeing very strong growth in client acquisition, very strong growth in AUA, safely double digits in terms of asset growth in that business, and it's really been powering the performance of the wealth franchise and the personal and business bank. On the connectivity side, we talk about connectivity because it's such an important part of our commercial and corporate franchise that these businesses do interact and the face of the client should be one face.
If you're a commercial client, you are seeing cooperation with the capital markets business on interest rate structuring, on FX structuring, on capital market solutions generally being brought in to the commercial clients. The depth of relationship is strong. About 95% of our commercial clients have a deposit relationship with us.
Roughly a third of them have a wealth management relationship with us, and that number on the wealth management side isn't growing as rapidly because we're still acquiring clients. We do continue to deepen those relationships, and so it's performing quite well as well, and happy with the progress. You're seeing high single digit to low double digit growth in assets balance on both sides of the balance sheet.
The businesses on commercial banking on both sides of the border and in capital markets are performing quite well. That final pillar when it comes to enable, simplify and protect, it's a very big and important pillar for us. It's about making sure everything from defense when it comes to cyber and AML, we're investing at pace.
It's also where we're deploying some of our AI solutions, whether it's CIBC AdvisorAssist, which is really helping the frontline advice, whether it's on our CIBC AI, which we've rolled out the first agentic AI solution in Canadian banking to a broad network internally to be able to just change the way we work and change the productivity of how we work. There's a lot going on there. All of that strategy, and it's just kind of a quick flyby on the strategy.
It's been what's driving compounding double-digit EPS growth, compounding increases in ROE. We've had a strong increase in profitability, a strong increase in earnings per share. What gives us the confidence that a lot of that performance is sustainable and repeatable is the fact that it's on strategy, and we're delivering on what we've been talking about for quite some time.
Great. On your recent earnings call, you announced an Investor Day for December 9th. I do not want to steal your thunder, but I am sure you are deeply in preparation for Investor Day. Can you talk about some of the themes that you are thinking about and focusing on as you get prepared for this?
Yeah. For starters, that flyby I just did on the strategy needs a deeper dive. I will give you a data point here, a data point there, but we do owe the market a set of KPIs to better understand the strategy, to really be able to go deeper. We will spend much more time on each of our pillars. We have to refresh the pillars a little bit.
The way I described it just now, it sounds like there is a strategy for our retail bank, a strategy for our wholesale bank, and you just kind of combine them into an overall strategy. It is kind of the reverse. There is an enterprise strategy that looks at making sure we are deepening relationships, making sure that we are using innovation and technology, and making sure that we are optimizing the expense base and optimizing the businesses that are a little bit more commoditized.
You will see that in each of the businesses. We are going to reframe a little bit how we talk about our strategy. The execution and the direction that we are taking is not changing, but the way we talk about it will hopefully help the market understand a little bit better how we are executing against it, what makes it repeatable. We owe the market a refreshed set of targets as well.
Our official ROE target is 15% +. We are 16.9% year to date, so we do owe the market a bit of a refresh on targets. We want to spend a little bit of time on a couple of things that we think are underappreciated in our bank, one of them being efficiency. The top line has been quite strong, and we have been quite pleased with the operating leverage performance that we have been putting up.
Because we have talked so much about the top line, we probably have not talked as much about what we are doing from an efficiency perspective. We think the opportunity is very significant in front of us, particularly as you expect revenues to slow once the capital markets activity normalizes a little bit. The other is just resource allocation generally, and how we think about resource allocation, because each of our businesses, they are quite complementary, and they use resources a little bit differently.
So rolling this up into an overall strategy that helps you better understand our bank, better understand our management team and our leadership and how we work internally, what we mean by connectivity, a little bit of talk about disruption. There is a lot coming. As you say, we are deep in the preparation for it. Excited to tell our story and excited to be able to go a little deeper.
Oh, great, Rob. Since sitting here a year ago, you've seen your ROE expand about 260 basis points. I think you could help us think about how much of that improvement would you allocate to structural improvements, versus how much is a function of better market conditions, whether it's capital markets or interest rate or credit quality?
Yeah. There's been a pretty significant focus on ROE in the marketplace over the last little while. In a lot of ways, we're happy to have the company because we've been focused on ROE as a bank for quite some time. In fact, the strategy as it's been constructed is really about improving the return profile and improving the repeatability and sustainability of the results.
When you think about what's really underlying the strategy, it's about making sure the deeper you go on relationships, the more you're going to get both sides of the balance sheet, the more you're going to better understand your client. The better understanding you have of the client, the better your loss rate performance should be. All of these things are ROE enhancing. There is no question.
I would say that the ROE improvement that we've seen is very much structural in terms of the profitability that we now are comfortable putting up. The cyclical component of this, and you mentioned the capital markets environment being constructive, it clearly has been, not just for us but for the industry. It's perhaps advanced it a little bit in terms of the pace at which we've gotten to where we thought we would get over time. But it's consistent with the strategy.
It's consistent with what we've been doing, and we actually still think there's more opportunity to continue to move in that direction. As much as the environment has helped, and clearly interest rates and markets have both helped, we think that there's a structural improvement in our profitability that we're comfortable is enduring.
Great. I just want to talk a little bit about capital. OSFI recently reduced the Domestic Stability Buffer, also dropped the CET1 ratio to 11%. You guys are sitting at like 13.4% at three-quarter. The completion of the sale of CIBC Caribbean adds another 20 basis points + maybe in first half 2027. Going forward, where do you think is an appropriate capital level to run the bank? How quickly do you think you should get there?
Yeah, those are two questions, right? When we think about appropriate capital levels, higher is always better in terms of just the strength and the optionality that it provides. What we've said in the past is we think minimum capital being something in the area of 75 basis points - 100 basis points clear of the regulatory minimum, which OSFI's recent move now is 11%.
So that would suggest 11.75 to 12 being a minimum. Beyond that, you want to have a bit of a buffer to your minimum just to give you some operating flexibility. In terms of what we target internally, it's a little bit higher than that. Again, it's really to be able to provide the optionality that you want to have to support your clients.
The encouraging thing about the environment we've been in is that when things do get unsettled in the marketplace, whether it's geopolitical, whether it's trade or any other issue that happens to come forward, we're quite confident right now in just telling our front lines, "Go talk to clients, service the clients, work with the client to get to where they need to be.
Don't worry about us, we're fine." That's part of the operating philosophy behind the capital ratio. So we're sitting at 13.4%, to your point, likely to go higher over the near term as our divestiture in the Caribbean closes. But we're not in a rush to get down to a specific level. We feel like we've been delivering on all of our financial targets. You mentioned the pace of ROE expansion.
We've been delivering EPS growth that's in the double digits now for nine or 10 quarters in a row. So all of our financial targets are being hit while carrying excess common equity, while carrying excess liquidity. It's the right way to run a bank, right? Things do go bump in the night. There are opportunities that present themselves. We're not thinking inorganic.
We're very much an organic capital deployment strategy. We do think over time there will be opportunity to deploy more into organic growth. So when we think about capital, where we're comfortable operating and how quickly we want to get there really are two different questions, and we're comfortable with the levels of capital we're running today, particularly since we're delivering on what we're trying to deliver.
Great. Some people have stated that they think that Canadian banks are holding onto capital in anticipation of an acceleration of loan growth in 2027. In 3Q, Canadian commercial loans grew at a healthy 7% year-over-year pace. What do you see as the main drivers of that growth? Do you expect this momentum to continue into next year?
It has been a fairly diversified portfolio of growth that we have seen. There is no specific industry that I would call out. I mentioned earlier that there is a lot of the economy that is not tied to trade. There is a lot of the economy that continues to just grow. It has been across the board a strong performance, which we expect to sort of continue.
There is a lot of talk, particularly on the trade file around, when are we going to get some clarity and what is going to happen next? But one of the things that it has done for the Canadian economy is it has woken us up a little bit to the realization that we need to have other pillars to rely on from a growth perspective that are complementary. It is not an or strategy, it becomes an and strategy.
When we think about the major projects office that has been stood up in Canada, when we think about infrastructure investments, we think about the development of the North, we think about the defense industry, which we put a target out in supporting CAD 2 billion and to support the medium-term outlook for the defense and resiliency industries in Canada.
When you think about international trade flows, when you think about inter-provincial trade barriers being reduced, there is a lot of things that become additive to whatever ends up being the story on trade flows within the country. All of that together gives us, we don't think it is misplaced optimism about the medium-term outlook for Canada.
A lot of those things I just described are not quite yet finding their way into the pipeline today of growth, which we still think is a robust one, both on the capital markets side and on the commercial banking side. We think there is opportunity to continue to grow into 2027 that will ultimately be augmented by some of those things as they come a little closer into the forecast horizon, if you will. For the coming year, it remains fairly diversified. It remains across our businesses.
More business-led, I would suggest, and consumer-led in terms of the growth in the coming year. The consumer side still feels like it is a low to mid-single digit kind of growth profile, where the business side feels more in the mid to high single digit kind of growth profile.
Great. The flip side, though, the question always to higher loan growth is often followed by credit quality concerns down the road. I think in the recent quarter, you pointed to a handful of idiosyncratic loans having an outsized impact on impairments. Maybe you can briefly review these credits and why you feel comfortable with the overall exposures.
Yeah. We've had, particularly at our commercial bank in Canada this year, we've had a few of these files that they were kind of on the watch list for some time, and they tipped over into impaired over the course of the year. When you have a few of these files tip over, and idiosyncratic is one of a banker's favorite words. But in reality, you kind of go back and look, and can you find a pattern?
Is there anything here that would suggest there's something wrong in a pocket of the book, in a pocket of a country, in a specific industry somewhere? There's really no pattern to be found among these things. It just feel when you have a diversified portfolio at any given time, there's going to be a few accounts that are wobbling regardless of the economic environment.
That's what's been happening to us this year. Losses have ticked a little bit higher. It doesn't feel like anything concerning, and it's well within our risk tolerance and well within our expectations in terms of performance for the environment that we're in.
The issue when you start to talk about commercial, particularly commercial and corporate loans, is it doesn't take many of these files to tip over into impaired to move a 1 basis point, to move another basis point or 2 basis points. In terms of basis points, our loss rate has bounced a little bit higher than it has been in the last few years. But it's nothing concerning and nothing that feels like it's getting away from us in any way.
The business that we're putting on today, there's good business to be done in bad times and good times, just like there's bad business to be done in good times and bad times. We're very much focused on doing the good business, growing with the right clients, and taking advantage of the opportunity of having a strong balance sheet, of having a strategy that resonates with our clients on both sides of the balance sheet to continue to grow our business.
We're comfortable with the risk profile, we're comfortable with the credit book, and we do think we're, again, there's always a path dependency when you talk about credit. But for what we can see from a macroeconomic perspective, we're comfortable with where we are from a guidance perspective as well.
Excellent. One of the major drivers of CIBC's performance over the last year or so has been the material expansion in the net interest margin. Still the pace of NIM expansion in Canada has slowed, while faster loan growth relative to deposits has been a headwind on the U.S. NIM. Given these factors, how much runway do you see left for NIM expansion?
Yeah. We still think there's some. I will say the caveat on net interest margin is always that there's no piece of guidance that we give that has more assumptions embedded within it than the net interest margin. There's a lot of moving parts to this, and so when I try to discuss this internally and externally, think about it in three different buckets, right?
One of them being our hedging and positioning strategy of essentially a lot of our non-interest sensitive deposits and what are we doing with it. In Canada, we call it tractoring. Other markets you hear the words like laddering. Essentially, it's just the reinvestment of those flows that come in. It's an oversimplification to suggest looking at the five-year swap rate, but it's not directionally wrong to look at the five-year swap rate in terms of what's happening.
When you think about the hedges that are rolling off and the hedges that are rolling on, there's still a pretty healthy gap between those two things, and particularly as the interest rate environment remains fluid. From what we can see today and where the forward curve is today, those lines don't really intersect until somewhere deep into 2027 at this point.
So we still think that hedging and positioning part of the story is going to provide that basis point or two of quarter-on-quarter improvement to the net interest margin at the all bank level. The second bucket is the one that's a little bit harder to predict, and it comes down to business mix, right? Particularly, part of that is client driven and part of that is strategy driven. We have de-emphasized the mortgage as a customer acquisition channel.
Single product mortgages don't interest us, and we are not active in the mortgage broker channel. So we are not looking to be out front of the mortgage business. We're going to grow the mortgage business aligned with our clients and as one of the products we offer to our deep client relationships, for sure. But our focus has become much more on everyday banking, which means checking accounts and credit cards. Both of those are margin enhancing.
Now, as we pursue the strategy, that's really actually been the bigger driver of our margin expansion over the last couple of years, three years, has been the execution of that strategy and the fact that the mortgage market hasn't been growing as rapidly.
The same is true on the deposit side, where checking accounts in favor of GICs, term deposits, even if you see that overall deposit balance is being flattish, the quality of the revenue and the margin on the revenue has actually been improving. You are seeing that as a driver of the improvement on the margin as well. That mix has always got a little bit of customer choice around it as well.
In any given quarter, it is the reason why the guidance that we provide always allows for a little bit of that customer choice to kind of go in the other direction. Because if mortgages do happen to grow a little faster, we are going to participate in that growth, and you are going to see a little bit of that margin being, just from a business mix perspective, eroded away.
Then the final part of it is pricing. The pricing environment, generally stable. The commoditized businesses like term deposits, like residential mortgages notwithstanding, pricing has generally been stable. We are all going to have, from time to time, our pricing specials that go on and come off and the rest.
But generally speaking, the competitive environment is intense but stable. So layering all that together is where we come up with the we think it is going to be flat to gradually higher for the next little while. So we still think there is some opportunity in the margin. Perhaps not the opportunity that we have seen in the last couple of years, where the margin really has risen quite substantially, but we still think there is some tailwind behind it.
Great. Then, just moving on to fee income businesses. Wealth management segment show continued momentum in assets under management and administration. Do you expect to continue to take share in this business, and would you consider acquisitions or strategic partnerships to further expand the business?
Yeah. The wealth business has been performing well, not just because of the beta component of it. The markets have obviously had a lot to do with it, and we have seen some good growth in assets under management and assets under administration, simply because market levels have been rising.
Our sales performance is what we are particularly happy with, and I come back to the execution of the strategy. When you look at our wealth business, you kind of have to think of it beyond just the specific wealth segment. Because as an example, Imperial Service, think of it like a private banking offer for the mass affluent. We are the only bank in Canada that has a bit of a distinct channel there. We have empowered it with a digital CIBC GoalPlanner.
We've empowered it, as I mentioned, with an eCRM and also some AI tools to provide better knowledge and understanding of where the assets are. But when you come in and do a financial plan with us, the only way to get a constructive financial plan is to tell us everything that you have. Once you tell us everything that you have, then therein lies the opportunity to internalize some of those assets. We've been seeing it.
Mutual fund sales as a percentage of AUM, we've been number one or number two in the market for a number of quarters in a row now. We are at every confidence that that performance should continue. Not every quarter, depending on the quarter, but it's again part of the execution of the strategy.
We've also been backfilling and infilling some of the wealth products or asset management products in which we've been a little bit lighter. ETFs, we're not going to be a major ETF player, but it was a bit of a gap in our shelf that we've been filling. Same is true of alternative investments, were a bit of a gap in our shelf that we've been filling, and that's been helping as well. We're adding advisors in the private bank. We're adding advisors in our full service brokerage.
Imperial Service continues to grow, and we think there's still a big opportunity in front of us on the mass affluent. All of which tells us that the opportunity on wealth management remains significant. One of these that you should expect to hear more about at Investor Day, I probably didn't talk so much, was we've resegmented.
There'll be a specific presentation and targets on wealth management. But what you've just heard is the reason we're optimistic that there's a nice growth profile in wealth management, and that's fee revenue. That's ROE enhancing revenue, and it helps just generate capital as well. We're quite excited about the path forward on wealth management.
On the capital markets business, despite ongoing economic uncertainty, both investment banking and trading have been strong over the course of 2026. Do you expect this trend to continue in the near future?
Capital markets forecasting, maybe right behind net interest margin forecasting in terms of the number of assumptions that I have to make to be able to get there. It really has been client focus flow. Our clients have been active. We have been expanding internationally, including here in the U.S. We have been adding people, we have been adding capability in a lot of ways tied to areas that we are strong. In Canada, we are all things to all people.
As we exit the country and move into some of the other markets, we are cognizant of the fact that there are large-scale players, and that we have to find an area where we can build a right to win. It does not give you the right to win, but it has to at least exist for you to be able to expand into it.
When we look at the growth profile that we have been putting up, clearly the growth has been well in excess of what you would consider a sustainable rate of growth. But I would say the growth rate has been more cyclical rather than the level to which we have gotten in terms of the run rate earnings. We do think there is still opportunity to grow from here.
We do still think there is opportunity to get better. The guidance that we gave about the second half of the year was we expected H2, which we are almost completed with H2, but we expected H2 to be down from a very strong H1, but to be up year-on-year from what was actually a very strong H2 last year as well. When we think about the growth rate going forward, this is a business that we have historically targeted 7%-10% growth.
That does not mean we are going to do that every year, and clearly for the last couple, we have been well in excess of that 7%-10% range. But when we think about the organic opportunity and the opportunity to grow with our clients, we are still optimistic about the future. The pipeline is looking quite strong. As we think about 2027, we are still optimistic that there is more to do.
Great. Then kind of moving further down the income statement. After 12 consecutive quarters of positive operating leverage, what leverage do you have now to continue generating positive operating leverage? Are you looking to make additional investments? Where do you think you stand on technology investments compared to kind of competitors?
Yeah. We've taken advantage over the last number of quarters of a strong revenue environment to accelerate some of the investments that we otherwise would have made. We never go into a year planning for very strong revenue because if you plan for very strong revenue and you decide to invest into it, the only thing you know for sure you're going to get is the investments and the spend part.
We start from a planning posture as we enter a year, assuming it's going to be a slower revenue environment and feeding it in rather than having to take it back over time, which has allowed us that consistent operating leverage. I mentioned when we were talking about Investor Day how we do feel like the efficiency story at CIBC is probably underappreciated, and it's probably underappreciated because we haven't talked about it enough.
There is a lot of work going on from an efficiency perspective. We start from the perspective of every one of our businesses, every one of our functional groups is expected to just generate efficiency year on year. It's something that we track a couple of percentage points of their operating expenses. It's something that we track, we bake into the plans, and we make sure that everyone is delivering. Over and above that, though, when we start to think, and one of the things that AI has now allowed us to think differently around is really just getting into end-to-end process.
A lot of the efficiency opportunity exists where you would expect it to exist, that intersection between operations and technology and retail front office in the biggest part of our bank, the part of the bank that serves our biggest customer base, and the part of our bank that has the highest number of FTE and the highest number of processes.
We're looking at things end to end and looking at things differently, whether it's in our contact centers, whether it's in our residential mortgage end-to-end processes, whether it's in our front lines and how we staff and the productivity of our front office. We are looking end to end, and we'll talk more about how the opportunity in front of us is there.
Now, when we think about this, and the challenge in all of this is, yeah, we'll put out some big targets and give you some sense of where we're going to go from an efficiency perspective. We do have to reinvest in our growth. We're a growth bank. We do still think each of our businesses has growth opportunities in front of them that require investments.
Operating leverage is, for us, the right way to look at efficiency, and that we can sustainably generate operating leverage. We're quite proud of a 12-quarter winning streak on operating leverage now. I almost hate to say 12 quarters because it sounds like we promise it quarterly. We aim for it annually. We've been delivering it quarterly.
But part of it is just making sure that we are making the right investments at the right time to be able to generate that revenue growth that will help sustain the operating leverage over time. It's a substantial opportunity in front of us. We continue to remain optimistic on the operating leverage front and on the growth front. They sort of fuel each other, right? Because the more efficiency you can take out of the back and middle office, the more it can power investments in the front office that allows us to spend more time with clients and allows us to continue to grow the franchise.
Great. CIBC highlighted increased digital adoption and productivity gains through its AI platform. How do you plan to leverage this trend to improve operational efficiency and customer experience? Are there any new digital capabilities you expect to roll out in the coming quarters?
Yeah. We've done a number in the last little while, and there's a lot more to be done. The CIBC AI internal engine that we've built ourselves is actually quite powerful and has been rolled out to the entire bank, and adoption rates continue to rise. When it comes to AI, step one really is transforming the culture in terms of the art of the possible and thinking, what can you do digital-first?
What can you do through technology that allows you to become more productive? Again, when you're in growth mode, typically growth mode means adding people. When we're measuring productivity, we're not looking to remove a whole bunch of staff. We're not looking to dramatically change our FTE count. We are looking to improve productivity per FTE.
When it comes to tools, like I mentioned, CIBC AdvisorAssist, which really is about helping advisors prepare for meetings, helping with the meeting notes and charting notes, and really it should allow us to spend If an advisor could do four meetings a day with a client, now they should be able to do five.
It's not necessarily about harvesting all of this down to the bottom line, it's about getting more of that productivity. It should also mean individuals should be using AI in their own tools. Again, we've provided them with the tools to automate the daily tasks, to automate the repetitive tasks, to allow them to spend more time analyzing, more time advising, excuse me, more time advising the businesses that they serve or the clients that they serve.
That CIBC AI, the AdvisorAssist, DocuMind is an internally developed document ingestion, automatic document ingestion. All these little things that become part of an end-to-end solution, become part of that efficiency journey that allow our individual employees and individual team members to become more productive and to go off in search of better work to do. You are actually improving their jobs. You are improving the quality of their interactions, and we are able to grow more rapidly because they are more productive. There is a lot being done, a lot more to come.
Great. I just want to note, CIBC has delivered us solid results driven by steady execution, kind of even exceeding your key financial targets of 7%-10% earnings growth and a 15% ROE. Maybe, as we are closing out, I just want to give you the final word and kind of thoughts ahead of Investor Day.
Yeah, listen, I will say one of the key things to think about for us is balance, right? We want to be balanced between fee income and net interest income. We want to be balanced between generating efficiencies and investing for the future, right? We want to be balanced in terms of our individual business units. To be sure, as I mentioned, capital markets is having a moment right now.
But we want to make sure that all of our businesses are growing because the balance sheet works best when all of our businesses are growing. Everyone kind of uses resources differently. That balance has to exist there as well. Then when we think about ROE versus EPS, it is the same balance that we are after, right? We can continue to push the ROE higher and higher and higher, well then, by sacrificing growth.
But we want to make sure that we are making the right investments, building the right businesses, and making it sustainable. So even when we think about our targets and the complementary nature of ROE and EPS growth, it is not one or the other. It has to be an and, which means that balance is important.
So for us, the results that we put up, we are quite pleased with record year to date earnings and strong performance. We still think we are scratching the surface in terms of what our franchise can do. We still think the strategy is the right strategy. We have got the right people, the right technology, the right investments, the right balance sheet, and we are just pointed in the right direction.
You should expect from us more of what you've seen in the past, which is that consistent, sustainable growth within risk tolerance and in a way that generates a premium ROE and a premium total shareholder return.
Great. Thanks. We have a couple minutes left if there's any questions that people have in the audience. All right. Going once. All right then. Please join me. We'll give you a couple of minutes back. Please join me in thanking Rob for his presentation today.
Thanks, everyone. Appreciate it. Thanks.