Newspaper article The Canadian Press

CIBC's Q4 Earnings Beats Expectations as TD's Results Fall Short

Newspaper article The Canadian Press

CIBC's Q4 Earnings Beats Expectations as TD's Results Fall Short

Article excerpt

CIBC's Q4 net income up 25% as TD misses mark

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TORONTO - The Canadian Imperial Bank of Commerce's 25 per cent rise in fourth-quarter profits was helped by better-than-expected performance in the U.S., while rival Toronto-Dominion Bank's double-digit profit lift fell short of market expectations amidst a retracement in its earnings south of the border.

CIBC, Canada's fifth-largest lender, reported net income of $1.16 billion in the three months ended Oct. 31, up from $931 million during the same time in 2016. On an adjusted basis, CIBC's profit amounted to $2.81 per share, up eight per cent from the fourth quarter of 2016 and beating the $2.59 in adjusted earnings per share expected by analysts surveyed by Thomson Reuters.

The major contributor to CIBC's earnings continued to be its Canadian personal and small business banking division, which earned an adjusted quarterly profit of $623 million, up 11.3 per cent from a year earlier.

But it was CIBC's U.S. commercial banking and wealth management unit that saw a major bump in profit, with net income for the quarter of $107 million -- more than four times the $23 million reported during the same quarter a year earlier.

That reflected a full quarter of "strong performance" from The PrivateBank, after CIBC purchased its parent PrivateBancorp for roughly US$5 billion in June and rebranded it in September as CIBC Bank USA.

"U.S. commercial banking and wealth management continue to exceed our expectations ... The former PrivateBank showed one of its best quarters ever," CIBC president and chief executive Victor Dodig told analysts on a conference call Thursday.

That purchase, along with the acquisition of private wealth management firm Geneva Advisors also headquartered in Chicago, was part of CIBC's strategy to deepen its presence in the U.S. and generate 25 per cent of its profits from south of the border in the medium term.

Meanwhile, its larger rival TD earned $2.71 billion in its latest quarter, up 17. …

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