Canadian Imperial Bank of Commerce's fiscal second-quarter profit plummeted 71 per cent amid a surge in provisions for credit losses, as the main theme for this week's reporting season extended into another day.
CIBC's net income for the three-month period ending April 30 was $392 million, compared to $1.35 billion a year earlier. On an adjusted basis, it earned $0.94 per share. Analysts, on average, were expecting $1.60 in per share earnings.
The bank's set-asides for loans that could go bad rose more than five-fold from the previous quarter, with provisions reaching $1.41 billion, compared to $261 million in the fiscal first quarter.
CIBC also announced Thursday it was maintaining its quarterly dividend at $1.46 per share.
"Our capital position remains strong, giving us flexibility and resilience as we navigate the current environment and continue to advance our long-term client-focused strategy," said CEO Victor Dodig in a release.
"This will enable us to further diversify revenue streams, deepen client relationships and improve our efficiency as we continue to deliver value to our shareholders."
CIBC posted double-digit profit declines across all of its major divisions in the fiscal second quarter, with its U.S. banking and wealth management unit suffering the sharpest erosion as adjusted earnings fell 89 per cent even as revenue increased.
The bank's core operations in Canada also suffered, with profit sliding 64 per cent year-over-year. CIBC said the division's revenue was held back by the low interest rate environment and the bank's relief plans for clients amid the COVID-19 pandemic.