Canadian Imperial Bank of Commerce reported better-than-expected quarterly profit on Wednesday, helped by gains in its capital markets business and as it set aside lesser money to cover bad loans.
Net income at the capital markets unit surged 63 per cent, driven by higher revenue and lower provision for credit losses.
Strength in that segment also drove quarterly profit beats for the other big Canadian lenders Royal Bank of Canada, Bank of Montreal and Bank of Nova Scotia.
Canada’s fifth largest lender recorded an employee severance charge of $339 million.
This comes after chief executive officer Victor Dodig flagged layoffs late last month and told staff that CIBC needs to challenge itself to be “a more efficient bank by focusing on continuous improvement and keeping a careful eye on costs.”
Total provisions for loan losses, or the money a bank sets aside to cover unpaid loans, fell nearly 23 per cent.
Net income attributable to common shareholders rose 2.5 per cent to $1.21 billion, or $2.63 per share, in the first quarter ended Jan. 31.
Excluding items, the bank earned $3.24 per share. Analysts on average had expected $3.00 per share, according to Refinitiv IBES data.
The bank also announced a raft of senior executive changes, including a new head of personal and business banking and a new chief risk officer.
© Thomson Reuters 2020
