Canadian Imperial Bank of Commerce or CIBC (CM,CM.TO) reported Thursday a sharp increase in fourth-quarter profit, driven by one-time gain and lower charges, despite higher loan loss provisions. Revenues declined from last year, yet topped Street projections.
Fourth-quarter net income applicable to common shares jumped to C$756 million or C$1.89 per share from C$458 million or C$1.17 per share a year earlier.
The latest quarter results included a positive impact of C$0.04 per share as a gain on sale of a merchant banking investment was partly offset by a loss from the structured credit run-off business and a loan loss in exited European leveraged finance business. The prior year's results included negative impact of C$0.49 per share.
Cash earnings per share, which excluded one-time items, grew to C$1.91 from C$1.19 in the same period prior year.
On average, 15 analysts polled by Thomson Reuters expected earnings per share of C$1.81 for the quarter. Analysts' estimates typically exclude one-time items.
Total revenue declined to C$3.20 billion from C$3.25 billion a year earlier, while eight analysts estimated revenues of C$3.05 billion for the quarter.
Net interest income declined primarily due to narrower spreads, offset in part by volume growth in most retail products including the impact of the MasterCard portfolio, and higher trading-related income. Non-interest income also declined as prior year results were benefited by foreign exchange gains of C$411 million on capital repatriation activities.
For the quarter, provision for credit losses climbed to C$243 million from C$150 million a year earlier, mainly reflecting higher provisions in CIBC FirstCaribbean and exited leveraged finance business in Europe.
Segment-wise, Retail and Business Banking revenue increased due to higher treasury allocations, volume growth across most lines of business and higher fees, partially offset by narrower spreads. Revenues from Wealth Management and Wholesale Banking also grew for the period.
For the year 2011, CIBC's net income applicable to common shares increased to C$2.90 billion or C$7.31 per share from C$2.28 billion or C$5.87 per share last year. Cash earnings per share rose to C$7.39 from prior year's C$5.95. Total revenue increased to C$12.25 billion from prior year's C$12.09 billion.
President and Chief Executive Officer Gerry McCaughey said, "Our financial results reflect our first principle and strategic imperative which is to be a lower risk bank targeting value creation for our shareholders by delivering consistent, sustainable earnings over the long term."
The company added that it continues to take steps to further grow business by investing in organic growth and through acquisitions.
Further, CIBC said its board of directors declared a dividend of 90 cents per share for the quarter ending January 31, payable on January 27, to shareholders of record at the close of business on December 28.
CM closed Wednesday's regular trading at $71.36, up $3.54 or 5.22 percent on the NYSE.
CM.TO settled at $72.91, up $3.04 or 4.35 percent in Toronto.
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