Canadian Imperial Bank of Commerce (CIBC) trounced first-quarter profit estimates on Friday, as growth in the lender's capital markets division boosted revenue and more than offset a decline in other units.
The Canadian Imperial Bank of Commerce logo is seen on a building in Toronto, Ontario, Canada September 27, 2021. REUTERS/Chris Helgren/File Phototrounced first-quarter profit estimates on Friday, as growth in the lender's capital markets division boosted revenue and more than offset a decline in other units.
The Toronto-based lender kicked off the first-quarter earnings season for major Canadian banks. Profit in capital markets jumped 13% to C$612 million in the reported quarter and drove an 8% rise in CBIC's overall revenue to C$5.93 billion. That helped the bank earn C$1.94 a share on an adjusted basis, comfortably above an estimate of C$1.70, according to data from Refinitiv.
Still, CIBC's profit took a hit after it set aside C$295 million in provisions for credit losses in the reported quarter, up C$220 million from a year-ago period, as it braces for increased odds of more loan defaults in a rising interest rate environment. Canada's central bank over the past 11 months has lifted interest rates at a record pace to 4.5% to tame inflation, which was 6.3% in December, still well above the bank's 2% target. Last month, the Bank of Canada said it would hold off on further moves to let the effects of past rate hikes sink in.
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