CIBC Rises After Becoming Latest Canadian Bank To Post Strong Earnings
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Key TakeawaysThe Canadian Imperial Bank of Commerce (CIBC) reported second-quarter earnings above expectations Thursday.CIBC, which beat analyst estimates thanks to growing profits from investment banking and U.S. operations, is the latest in a string of strong Canadian bank earnings to close out the month.CIBC also announced a change to its dividend program starting with the current quarter.
Shares of the Canadian Imperial Bank of Commerce (CM) gained in premarket trading Thursday after the bank reported second-quarter earnings above analyst expectations, the latest in a string of strong Canadian bank earnings closing out the month.CIBC's revenue and profit increased year-over-year, fueled by gains in each of its core businesses, from personal and commercial banking in Canada to its wealth management services both domestically and in the U.S.Revenue jumped 8% from last year to 6.16 billion Canadian dollars ($4.49 billion), above the C$6.06 billion analysts expected, according to estimates compiled by Visible Alpha. CIBC reported C$1.75 billion in net income, or C$1.79 per share, up 4% from last year and also above the C$1.59 billion and C$1.61 per share analysts had projected.Growth in All SectorsCIBC reported year-over-year profit growth in all four of its core businesses across Canada and the U.S., but also reported higher provision for credit losses (PCL) for the quarter of C$514 million, up C$76 million from the same time last year.Net income in CIBC's Canadian operations increased slightly, but it saw larger gains of over 70% profit growth from its U.S. operations.CIBC's capital markets division also grew its income by 13% from last year thanks to higher revenue from its investment banking and global markets businesses.CIBC's total assets crossed the C$1 trillion mark in the quarter, with deposits rising to C$732 billion from last year's C$723.4 billion.Dividend Announcements, ChangesCIBC also declared its quarterly dividend of C$0.90 Thursday, with payments set to be paid out July 29 to shareholders of record on June 28.The bank said Thursday it is making a change to its plan for those who choose to use their dividend to purchase more shares rather than receive cash payments.Starting with the current quarter, CIBC investors who choose to receive their dividend payment in the form of shares will receive common shares without a discount, compared to the previous system in which shares were issued with a 2% discount on the average market price.CIBC shares rose about 3% to $48.38 as of 8:45 a.m. ET Thursday, reversing Wednesday's 3% losses. Read the original article on Investopedia.
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