CIBC reports profits up as potential loan losses down, raises dividend

TORONTO — Canadian Imperial Bank of Commerce raised its quarterly dividend as it reported a rise in revenue and earnings while its provisions for potentially bad loans dropped.

The bank said Thursday it had bought back five million shares as it also raised its dividend eight per cent for the highest this quarter among its peers.

“This increase reinforces the confidence we have to deliver earnings growth,” said chief executive Victor Dodig on an earnings call.

The increase in the payment came as the bank says it earned $1.88 billion, or $1.90 per diluted share for the quarter ended Oct. 31, up from $1.49 billion, or $1.53 per diluted share a year ago.

Revenue for the quarter totalled $6.62 billion, up from $5.85 billion in the same quarter last year.

The bank took on significant provisions last year as it worked to fix issues in its commercial loans, including the struggling office sector.

Concerns have eased enough that the bank saw a 23 per cent drop in provisions for bad loans from last year, and down 13 per cent from the third quarter, to $419 million.

The lower provisions helped lead to adjusted earnings of $1.91 per diluted share in its latest quarter, up from an adjusted profit of $1.57 per diluted share a year ago.

The average analyst estimate had been for an adjusted profit of $1.79 per share, according to data provided by LSEG Data & Analytics.

Lower provisions were a key reason for the beat, said National Bank analyst Gabriel Dechaine in a note, as they came in 26 per cent below expectations for a second quarter of surprise to the upside.

“A splendid finish,” he said of CIBC results, which also included guidance that was better than expected, plus a generous increase in payouts.

“Capital news was also positive, with the bank following up (five million) of share repurchases during the quarter with a juicy eight per cent dividend hike.”

CIBC said its Canadian personal and business banking business earned $743 million, up from a profit of $637 million in the same quarter last year, while its Canadian commercial banking and wealth management operations earned $516 million, up from a profit of $490 million a year earlier.

The bank’s U.S. commercial banking and wealth management business earned $202 million, up from a profit of $50 million a year ago.

CIBC’s capital market and direct financial services operations earned $428 million, up from a profit $383 million in the same quarter last year.

The bank’s “corporate and other” segment reported a net loss of $7 million for the fourth quarter compared with a net loss of $75 million a year earlier.

This report by The Canadian Press was first published Dec. 5, 2024.

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Ian Bickis, The Canadian Press