One of Canada’s big six continues push to be less domestically focused
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Canadian Imperial Bank of Commerce’s push to be less domestically focused is showing signs of success, thanks to its June takeover of Chicago-based PrivateBank.
The country’s fifth-largest lender by assets posted profit of C$134 million from US commercial banking and wealth management in the fiscal first quarter, only its second full reporting period since the $5 billion PrivateBank acquisition. A year ago the Toronto-based lender earned C$29 million from that US business.
Chief executive officer Victor Dodig is seeking to diversify CIBC beyond its borders, using the firm’s PrivateBank acquisition as a vehicle to expand business banking, wealth management and capital markets in the US. During a December investor event, Dodig acknowledged criticisms that CIBC was “too Canadian-focused” as the lender forecast that US earnings would almost double to 17% within three years.
CIBC is the first large Canadian lender to report results for the quarter ended January 31, posting adjusted profit that beat analysts’ expectations. The nation’s six biggest banks are expected to increase adjusted per-share earnings by 5% from a year earlier, according to analysts’ estimates compiled by Bloomberg. Bank results for the period will be affected by changes to accounting rules, impacts from U.S. tax reform and, to a lesser extent, Canadian mortgage rule revisions that kicked in on January 1.
Net income fell 5.6% to C$1.33 billion, or C$2.95 a share, from C$1.41 billion, or C$3.50, a year earlier, the Toronto-based firm said on Thursday in a statement. Adjusted earnings were C$3.18 a share, compared with the C$2.83 average estimate of 13 analysts surveyed by Bloomberg. The bank also raised its quarterly dividend 2.3% to C$1.33 a share.
Copyright Bloomberg News
