CIBC Posts Strong Profit Gains in Latest Quarter

Toronto-based Canadian Imperial Bank of Commerce saw significant profits in the third quarter, boosted by the strong performance of its personal and business banking businesses. Despite some caution from CEO Gerry McCaughey regarding the economic recovery and regulatory environment, the bank's shares rose 4.89% to close at $70.08 on the Toronto Stock Exchange. The net income of $640 million, or $1.54 a share, is up 47% from the same period last year.

Key Takeaways:

• CIBC's net income increased by 47% to $640 million in the third quarter, compared to $434 million in the same period last year.
• The bank's personal and business banking businesses saw strong performance, with retail markets revenue up 7% to $2.5 billion.
• Provisions for credit losses were more than cut in half to $221 million from $547 million in the previous year.
• CIBC's shares rose 4.89% to $70.08 on the Toronto Stock Exchange.
• CEO Gerry McCaughey expressed caution regarding the economic recovery and regulatory environment, but said the bank is well-positioned for the future.
• The bank's quarterly dividend remains unchanged at $0.87 per common share.
• The banking sector is facing challenges from international financial institution regulations aimed at preventing a repeat of the 2008 credit crisis.

Statistics:

• Net income: $640 million (up 47% from $434 million in the same period last year)
• Share price: $70.08 (up 4.89% from the previous day)
• Retail markets revenue: $2.5 billion (up 7% from the third quarter of 2009)
• Provisions for credit losses: $221 million (down from $547 million in the previous year)
• Dividend per common share: $0.87 (unchanged)

Sources:

• Toronto Star, "CIBC Posts Strong Profit Gains in Latest Quarter"
• Barclays Capital, research note by John Aiken
• Edward Jones, research note by Craig Fehr