CIBC profit tops estimates on better-than-expected provisions for bad loans

Globe and Mail

29-05-2025

Canadian Imperial Bank of Commerce CM-T reported higher second-quarter profit that beat analysts' estimates as the lender set aside lower-than-expected provisions for loans that could default and stronger activity in capital markets.
CIBC earned $2-billion, or $2.04 per share, up 15 per cent from the same quarter last year.
Adjusted to exclude certain items, the bank said it earned $2.05 per share. That edged out the $1.90 per share analysts expected, according to S&P Capital IQ.
'We are navigating the volatility in the global business environment from a position of strength, supported by our robust capital position, disciplined risk management and strong credit quality,' CIBC chief executive officer Victor Dodig said in a statement.
In March, CIBC tapped head of capital markets Harry Culham as its next CEO in October.
CIBC is the fifth major Canadian bank to report earnings for the fiscal second quarter. Over the past week, Toronto-Dominion Bank, Bank of Montreal and National Bank of Canada posted results that beat analyst estimates, while Bank of Nova Scotia's profit missed expectations. Royal Bank of Canada also releases results on Thursday.
Analysts expected Canada's banks to continue grappling with higher loan loss reserves activity as U.S. President Donald Trump's trade war threatens a deeper economic downturn.
In the quarter, CIBC set aside $605-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was lower than analysts anticipated, and included $142-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses.
In the same quarter last year, CIBC set aside $67-million in provisions.
Total revenue rose 14 per cent in the quarter to $7-billion while expenses increased 9 per cent to $3.8-billion, which the bank said was driven higher performance-based compensation.
Profit from Canadian personal and business banking was $734-million, up 4 per cent from a year earlier, driven by higher revenue.
The Canadian commercial and wealth management division generated $549-million of profit, up 13 per cent on higher loan and deposit margins and fee income, as well as an increase in fee-based revenue from higher average assets under administration and assets under management.
Profit from the bank's U.S. commercial banking and wealth management unit was up 79 per cent at $122-million, driven by higher revenue and a lower provision for credit losses.
Capital markets profit rose 20 per cent to $566-million on higher financing and trading revenue, corporate banking revenue and debt underwriting activity.