CIBC Quarterly Profit Rises Despite Increase in Credit-Loss Provisions

By Robb M. Stewart

Canadian Imperial Bank of Commerce logged stronger-than-expected earnings in the latest quarter as a rise in revenue more than made up for an increase in the money set aside to guard against potential defaults by its borrowers.

CIBC, one of the country's largest lenders, recorded net income of 1.75 billion Canadian dollars ($1.28 billion), or C$1.79 a share, for the three months ended April 30, against C$1.69 billion, or C$1.76, a year earlier. On an adjusted basis, the bank reported second-quarter earnings of C$1.75 a share, topped the C$1.65 analysts polled by FactSet expected.

The result was dented by a rise in the bank's provision for credit losses, which totaled C$514 million for the latest quarter, up C$76 million from the same period a year ago.

CIBC took no provision for credit losses on performing loans in the recent quarter, where it a year earlier saw a provision reversal that reflected a more favorable economic outlook, while its provision for credit losses on impaired loans was up largely due to higher write-offs in credit cards and its personal lending portfolio. The bank's provision for credit losses for the six months through April was up C$318 million from the same period in 2023.

Excluding provisions and tax, adjusted earnings for the first quarter were 8.6% higher than last year at C$2.69 billion, CIBC said.

Net interest income for the period rose to C$3.28 billion from C$3.19 billion a year ago, while noninterest income increased to C$2.88 billion from C$2.52 billion. That left total revenue up 8.1% at C$6.16 billion, beating the C$6.09 billion mean estimate of analysts.

The bank's common equity Tier 1 capital ratio stood at 13.1% for the three-month period, slightly wider than the 13% at the end of the last quarter.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 30, 2024 06:25 ET (10:25 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.