The Canadian Imperial Bank of Commerce stands in the financial district of Toronto, Ontario, Canada, on Friday, Feb. 21, 2020. Canadian stocks declined with global markets, as authorities struggled to keep the coronavirus from spreading more widely outside China. However, investors flocking to safe havens such as gold offset the sell-off in Canada's stock market. Photographer: Stephanie Foden/Bloomberg
, Bloomberg
(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.
Key Insights
- 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.
Market Reaction
- CIBC shares have advanced 26% this year, compared with a 23% gain for the S&P/TSX Commercial Banks Index.
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- 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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