By Ketki Saxena
Investing.com – CIBC (TSX:CM) became the first of the big six Canadian banks to report earnings this season, posting a net income of $432 million or 39 cents per diluted share for the quarter ended Jan. 31, down 77% from $1.87 billion or $2.01 per diluted share a year earlier.
The hit was mostly related to the previously disclosed US$770 million settlement to Cerebrus Capital Management, relating to a default on certain payments tied to a limited recourse note dating back to the Financial Crisis.
On an adjusted basis that excluded items such as the settlement, the bank said it earned $1.84 billion, down 3% from the same quarter a year ago, or $1.94 per share.
CIBC’s revenue for the quarter totalled $5.93 billion, up from $5.50 billion in the same quarter last year.
Analysts on average had expected a profit of $1.70 per share and $5.67 billion in revenue, according to estimates by financial markets data firm Refinitiv.
CIBC’s core Canadian banking business profit was down 14% year over year to $589 million, while rising interest rates and higher commercial banking volumes helped net income from Canadian commercial and wealth management climbed 2% to $469 million.
CIBC’s US banking and wealth management’s profit slipped by $25 million to $201 million as expenses and provisions for credit losses grew. Capital markets profit grew by 13% year over year to $612 million, despite market volatility.
CIBC’s credit loss provisions grew by $220 million to $295 million from the same time last year.
“In the first quarter, we delivered solid financial results as we continued to make steady progress in executing our client-focused strategy,” CIBC CEO Victor Dodig said in a statement.
“We have clear momentum in attracting and deepening client relationships, a resilient capital position, and strong risk management and credit quality, and we’ll draw on these strengths throughout fiscal 2023 to create further value for our stakeholders.”