Canadian Imperial Bank of Commerce or CIBC (CM.TO,CM) on Thursday reported an 8 percent increase in profit for the second quarter, helped by a lower provision for credit losses in addition to higher revenues across all its three segments. Revenue matched analysts' expectations, while earnings per share beat their estimates. The company also announced a 2 percent increase to its quarterly dividend.
Gerald McCaughey, President and CEO of CIBC said, "CIBC delivered solid results this quarter across our core businesses in Retail and Business Banking, Wealth Management and Wholesale Banking. These results reflect our strong focus on our clients as well as our underlying business fundamentals."
Segment-wise, retail and business banking net income for the quarter rose 9 percent to C$604 million, while revenue rose 2 percent to C$2.04 billion primarily due to volume growth across most products, wider spreads and higher fees.
Wealth management net income grew 16 percent to C$92 million, while revenue increased 6 percent to C$443 million, reflecting higher client assets under management driven by higher long-term net sales of mutual funds.
Wholesale banking net income surged 51 percent from the prior-year period to C$198 million. Revenue increased 25 percent to C$580 million on higher revenue from equity derivatives and commodities trading, higher revenue from corporate credit products as well as U.S. real estate finance, and revenue in the structured credit run-off business.
CIBC, Canada's fifth largest lender, said its net income for the second quarter increased to C$874 million or C$2.12 per share from C$810 million or C$1.90 per share in the previous-year quarter.
Excluding items, adjusted net income per share was C$2.12, compared to C$2.00 in the same period last year. On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of C$2.08 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenue for the quarter grew 2 percent to C$3.14 billion from C$3.08 billion in the year-ago period. Analysts had a consensus revenue estimate of C$3.14 billion.
Net interest income grew 4 percent to C$1.82 billion, primarily due to higher trading-related net interest income and wider retail spreads. These were partly offset by lower treasury-related net interest income.
Meanwhile, non-interest income declined 1 percent to C$1.32 billion, primarily due to trading losses in the quarter compared to trading income in the prior-year period, partially offset by higher mutual fund fees.
The company's provision for credit losses declined 14 percent from last year to C$265 million, reflecting lower write-offs and bankruptcies in the cards portfolio of the retail and business banking segment.
CIBC increased the quarterly dividend by C$0.02 per share to C$0.96 per share.
In Thursday's regular session on the NYSE, CM is trading at $77.96, up $0.32 or 0.41 percent on a volume of 40,853 shares.
On the Toronto stock exchange, CM.TO is trading at C$80.91, up C$0.48 or 0.60 percent on a volume of 113,599 shares.
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