Canadian Imperial Bank of Commerce’s traders gave the bank’s earnings a boost last quarter amid a strong stretch for fixed-income products.
Revenue from the capital-markets division rose to $1.48 billion (US$1.09 billion) in the three months through January, up 14 per cent from a year earlier, the Toronto-based bank said Friday. Overall profit topped analysts’ estimates for the fiscal first quarter.
CIBC’s global markets division is benefiting as central banks’ rate-hiking campaigns increase trading in bonds and rate-related instruments. The bank’s trading revenue, on a tax equivalent basis, rose 17 per cent from a year earlier, led by a gain in interest-rate products.
CIBC rose 1.9 per cent to $62.40 at 9:48 a.m. in Toronto. The shares have climbed 14 per cent this year, compared with a 5.2 per cent gain for the S&P/TSX Commercial Banks Index.
Net income fell 77 per cent to $432 million, or 39 cents a share, hurt by a provision for a lawsuit against the firm from Cerberus Capital Management LP. Excluding some items, profit was $1.94 a share. Analysts estimated $1.72, on average.
Revenue in CIBC’s Canadian personal and business banking unit rose 3.5 per cent to $2.26 billion as balances of all types of loans continued to rise.
“We have clear momentum in attracting and deepening client relationships, a resilient capital position, strong risk management and credit quality,” Chief Executive Officer Victor Dodig said in a statement that characterized the economic environment as “fluid.”
The bank set aside $295 million in provisions for credit losses, less than the $345.3 million analysts estimated. That’s also down from the previous quarter’s $436 million provision.
The bank’s gross impaired loans as a portion of its total loans and acceptances ticked up to 0.36 per cent, from 0.33 per cent in the fiscal fourth quarter. That’s still down 0.39 per cent a year earlier and well below pre-pandemic levels.
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