CIBC Starts Shaking Off Covid With Mortgages Driving Earnings Up
(Bloomberg) -- Canadian Imperial Bank of Commerce is starting to shake off the pandemic doldrums as the country’s hot housing market helped its domestic business revive revenue growth.
- CIBC’s Canadian personal and business banking unit snapped a streak of four straight quarterly year-over-year revenue declines, boosting sales 0.3% in the fiscal second quarter. Overall profit topped analysts’ estimates.
- With Canada’s vaccination campaign finally picking up steam, CIBC reduced the amount it set aside to protect against credit losses last quarter. Provisions for credit losses totaled C$32 million ($26 million) last quarter. Analysts estimated C$245.4 million in provisions, on average.
- CIBC has focused in recent quarters on reviving its Canadian mortgage business. The bank had C$234.7 billion of residential mortgages on its balance sheet at the end of the quarter, up 10% from a year earlier.
- CIBC’s foray into the U.S., via its acquisition of PrivateBancorp in 2017, is giving it avenues for growth beyond its home market. Earnings in the lender’s American business soared to C$216 million from C$15 million a year earlier, helped by higher wealth-management revenue.
- CIBC shares have advanced 26% this year, compared with a 23% gain for the S&P/TSX Commercial Banks Index.
- Net income quadrupled to C$1.65 billion, or C$3.55 a share. Excluding some items, profit was C$3.59 a share. Analysts estimated C$3, on average.
- Click here for more on CIBC’s second-quarter results.
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