Canadian Imperial Bank of Commerce or CIBC (CM,CM.TO) Wednesday reported a surge in its third-quarter profit despite lower revenues, reflecting a significant reduction in provision for credit losses.
The company's third-quarter net income was C$640 million, compared with C$434 million last year. Net income applicable to common shares grew to C$598 million from C$390 million a year ago. Earnings per share were C$1.53, up from C$1.02 in the prior-year quarter.
In the second quarter, CIBC's net income applicable to common shares was C$617 million or C$1.59 per share.
CIBC's results for the third quarter of 2010 included C$96 million after-tax or C$0.25 per share loss from the structured credit run-off business, and C$53 million after-tax or C$0.14 per share reversal of provision for credit losses in the general allowance.
Cash earnings applicable to common shares reached C$605 million in the quarter, up from C$397 million in the same quarter last year. Cash earnings per share were C$1.55, compared with C$1.04 in the same quarter of fiscal 2010.
Return on equity for the quarter was 19.8%, on top of 14.6% last year. Provision for credit losses declined to C$221 million from C$547 million in the third quarter of 2009.
CIBC reported third-quarter total revenues of C$2.85 billion, compared with C$2.86 billion in the comparable period of fiscal 2009.
Net interest income grew 13% from last year to US$1.55 billion, driven by higher treasury revenue, volume growth in most retail products, and higher interest income from trading securities, partially offset by lower interest income from available for sale securities.
Non-interest income was US$1.30 billion, compared with US$1.49 billion in the year-ago third quarter, a decline of 13%.
CIBC Retail Markets generated revenue of C$2.47 billion in the quarter, up 7% from a year ago, supported by strong results across the company's personal banking, business banking and wealth management businesses, as well as higher treasury allocations.
Personal banking revenue rose 6%, driven by solid volume growth across most products and higher fee income. Business banking revenue was up 5% on the back of solid volume growth across most products. Wealth management revenue grew 6%, primarily due to market driven increases in asset values, partially offset by lower trading commissions. Meanwhile, FirstCaribbean revenue declined 17% year-over-year, hurt by the impact of a stronger Canadian dollar.
CIBC Wholesale Banking revenue totaled C$315 million, down from C$552 million last year. Capital markets revenue was down by C$95 million to C$241 million, primarily due to lower fixed income and global derivatives revenue. Corporate and investment banking revenue declined by C$86 million to C$146 million, driven by lower revenue from U.S. real estate finance and lower gains net of write-downs in the core merchant banking portfolio.
CIBC also said that its board of directors declared a dividend of 87 cents per share on common shares for the quarter ending on October 31, 2010, payable on October 28 to shareholders of record at the close of business on September 28.
Looking ahead, CIBC expects that more moderate growth pace will continue for the remainder of the fiscal year, with Canada's housing market declining after the interest rate increases from the Bank of Canada and new rules for insured mortgages.
For the Retail Markets, CIBC sees moderation in growth in mortgages, as progress in employment growth is partially offset by rising interest rates. Wholesale Banking activities would be affected by the potential for increased market volatility and its impact on equity issuance.
Among others in the sector, Royal Bank of Canada (RY,RY.TO) is set to announce its third-quarter results on August 26.
The Toronto-Dominion Bank's(TD,TD.TO) results for the third quarter are scheduled to be released on September 2.
On the NYSE, CM closed Tuesday's trading at US$62.98, down US$1.74, on a volume of 527 thousands shares.
CM.TO ended trading at C$66.81 on the TSX, dropping C$1.36, on 2.26 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.