Canadian Imperial Bank of Commerce CM-T reported higher fiscal third-quarter profit on Thursday as capital markets earnings soared on robust trading revenue and its domestic retail banking unit had a strong quarter.
CIBC earned $2.1-billion, or $2.15 per share, in the three months that ended July 31. Quarterly profit was up 17 per cent from $1.8-billion, or $1.82 per share, a year earlier.
Adjusted to exclude certain items, CIBC said it earned $2.16 per share, which was well ahead of the consensus estimate among analysts of $2 a share, according to data from the London Stock Exchange Group (LSEG).
CIBC kept its quarterly dividend unchanged at 97 cents per share, and also announced a plan to buy back about 2.2 per cent of its outstanding shares.
Uncertainty over tariffs has weighed on economic growth and demand for loans at major Canadian banks, but concerns about the outlook appear to be easing.
CIBC earmarked $559-million of provisions for credit losses, which is money banks set aside to cover loans that are at risk of defaulting. That was below the $575-million analysts expected, according to LSEG, and down 8 per cent from the fiscal second quarter, when banks were stocking up on provisions near the peak of trade tensions with the U.S.
CIBC’s quarterly results continue a series of strong earnings for the bank, as Harry Culham prepares to take over as chief executive officer in November when current CEO Victor Dodig retires.
Profit from Canadian personal and business banking was $812-million, up 17 per cent from a year earlier. The bank had stronger revenue and profit margins on loans.
But loan growth was still modest at 2 per cent and the division had higher loan loss provisions, at $444-million, suggesting that high interest rates and economic uncertainty are still putting strain on some clients.
Capital markets profit surged 87 per cent to $540-million, as trading revenue climbed by 29 per cent in the quarter.
Volatile markets kept clients busy as they raced to adjust to shifting market conditions, and the unit also had higher returns from underwriting and advisory work, as well as corporate lending.
Canadian commercial banking and wealth management profit was $598-million, up 19 per cent. And profit from the same divisions in the U.S. was $254-million, or US$186, which was up 17 per cent.
The bank’s common equity Tier 1 capital ratio, which is a key measure of its resilience to shocks, was 13.4 per cent, unchanged from the second quarter.