Bloomberg News

CIBC Fourth-Quarter Profit Rises 59% on Investment Banking

December 01, 2011

Dec. 1 (Bloomberg) -- Canadian Imperial Bank of Commerce, the country’s fifth-biggest bank, said quarterly profit rose 59 percent, led by investment banking and consumer lending.

Net income for the fourth-quarter ended Oct. 31 climbed to C$794 million ($780 million), or C$1.89 a share, from C$500 million, or C$1.17, a year earlier, the Toronto-based bank said today in a statement. Revenue fell 1.6 percent to C$3.2 billion.

CIBC is the first Canadian lender to report fourth-quarter results. The Toronto-based bank’s profit was higher than a year ago, when earnings were pared by C$239 million in capital repatriation costs and losses in a structured credit business.

CIBC said it had adjusted earnings of C$1.87 a share, topping the C$1.80 a share average estimate of 16 analysts surveyed by Bloomberg News.

Canada’s eight-biggest banks will probably report average profit growth of 12 percent from a year earlier, Scotia Capital analyst Kevin Choquette said in a Nov. 18 note. Toronto-Dominion Bank, the country’s second-largest lender, also reports today.

“The Canadian banks continue to do pretty much the right stuff,” David Baskin, president of Baskin Financial Services in Toronto, which oversees about C$400 million including bank shares, said in an interview before earnings. “Everybody should be buying them, they’re really cheap.”

Canadian Imperial rose 4.4 percent yesterday to C$72.91 in Toronto trading. The stock has fallen 6.9 percent this year, compared with the 5.4 percent decline of the eight-company S&P/TSX Commercial Banks Index.

Loan Provisions

Canadian Imperial said it set aside C$243 million for bad loans, up from C$150 million a year earlier.

The CIBC World Markets investment-banking business earned C$172 million, compared with a loss of C$56 million a year ago when the unit posted losses from structured credit trading and corporate loan hedges.

Canadian consumer lending and business banking profit rose 15 percent to C$580 million, from C$505 million in the year- earlier period.

Wealth management profit, which includes mutual fund sales, rose 20 percent to C$65 million after adding earnings from its purchase of a 41 percent stake in American Century Investments from JPMorgan Chase & Co. in August.

“CIBC has lacked a real strategic growth focus and I think that wealth management is an area where they might be able to excel,” Craig Fehr, an analyst with Edward Jones & Co., said in an interview before earnings. “American Century, while not a cannonball by any stretch, is at least a seed of growth for them in a compelling area.”

Its corporate unit, which includes Caribbean banking, had a C$23 million loss, compared with a C$3 million loss a year earlier, the bank said.

--Editor: David Scanlan

To contact the reporter on this story: Doug Alexander in Toronto at

To contact the editors responsible for this story: David Scheer at; David Scanlan at

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