A CIBC sign in Toronto’s financial district in downtown Toronto is shown on Thursday, Feb. 26, 2009. The Canadian Imperial Bank of Commerce’s 25 per cent rise in fourth-quarter profits was helped by better-than-expected performance in the U.S., while rival Toronto-Dominion Bank’s double-digit profit lift fell short of market expectations amidst a retracement in its earnings south of the border. THE CANADIAN PRESS/Nathan Denette

CIBC’s Q4 earnings beats expectations as TD’s results fall short

TORONTO — The Canadian Imperial Bank of Commerce’s 25 per cent rise in fourth-quarter profits was helped by better-than-expected performance in the U.S., while rival Toronto-Dominion Bank’s double-digit profit lift fell short of market expectations amidst a retracement in its earnings south of the border.

CIBC, Canada’s fifth-largest lender, reported net income of $1.16 billion in the three months ended Oct. 31, up from $931 million during the same time in 2016. On an adjusted basis, CIBC’s profit amounted to $2.81 per share, up eight per cent from the fourth quarter of 2016 and beating the $2.59 in adjusted earnings per share expected by analysts surveyed by Thomson Reuters.

The major contributor to CIBC’s earnings continued to be its Canadian personal and small business banking division, which earned an adjusted quarterly profit of $623 million, up 11.3 per cent from a year earlier.

But it was CIBC’s U.S. commercial banking and wealth management unit that saw a major bump in profit, with net income for the quarter of $107 million — more than four times the $23 million reported during the same quarter a year earlier.

That reflected a full quarter of “strong performance” from The PrivateBank, after CIBC purchased its parent PrivateBancorp for roughly US$5 billion in June and rebranded it in September as CIBC Bank USA.

“U.S. commercial banking and wealth management continue to exceed our expectations … The former PrivateBank showed one of its best quarters ever,” CIBC president and chief executive Victor Dodig told analysts on a conference call Thursday.

That purchase, along with the acquisition of private wealth management firm Geneva Advisors also headquartered in Chicago, was part of CIBC’s strategy to deepen its presence in the U.S. and generate 25 per cent of its profits from south of the border in the medium term.

Meanwhile, its larger rival TD earned $2.71 billion in its latest quarter, up 17.8 per cent from $2.3 billion a year ago, boosted by its Canadian and U.S. retail banking business. Canada’s biggest lender by assets (TSX:TD) said Thursday the profit amounted to $1.42 per diluted share for the quarter ended Oct. 31, up from $1.20 per diluted share in the same quarter last year.

“Q4 was a great quarter for TD and a strong finish to fiscal 2017,” said TD president and chief executive Bharat Masrani on a call with analysts.

On an adjusted basis, TD said it earned $1.36 per diluted share, compared with $1.22 per diluted share a year ago. Analysts had expected an adjusted profit of $1.39 per diluted share, according to those surveyed by Thomson Reuters.

TD’s U.S. retail business earned $776 million, up 11 per cent in the same quarter last year. However, that was down sequentially 13.9 per cent from the $901 million in the third quarter of this year.

Wholesale banking, which includes TD’s capital markets and investment banking business, earned $231 million in net income, down from $238 million a year ago.

Provisions for credit losses, or money set aside for bad loans, for the quarter rose to $578 million compared with $548 million a year ago.

Shares of TD were down 2.4 per cent on Thursday to close at $73.24 in Toronto, while CIBC shares closed up three per cent at $118.14.

Barclays analyst John Aiken said in a research note that CIBC came in “well ahead of expectations on the back of exceptionally strong domestic retail and a better than forecast contribution from its new U.S. platform, including PrivateBank.”

TD, meanwhile, “disappointed on the back of a retracement in earnings in its U.S. retail segment,” he told clients.

“While far from a disaster, we are concerned that, with the strength of TD’s valuation over the past few months, the results (Thursday) could lead to some relative weakness as expectations become reset somewhat heading into 2018,” Aiken said in a separate note.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

COVID-19 scare sees Latvia-bound troops turn around, return to Canada

Those on board face another 14 days in isolation

2 dead, 8 hurt in South Carolina nightclub shooting

Police are searching for two suspects

Ponoka RCMP lay charges following home invasion

33-year-old man who arrived on bicycle is in custody

QUIZ: A celebration of dogs

These are the dog days of summer. How much do you know about dogs?

P.E.I. reports three new COVID-19 cases, including one seniors’ residence employee

CHARLOTETOWN, P.E.I. — Prince Edward Island reported new COVID-19 cases for the… Continue reading

Even pandemic can’t spoil July

July. Finally. It’s seems like the last three weird months have taken… Continue reading

‘You have to show up:’ NDP MP questions virtual attendance of Alberta Tories

NDP MP McPherson says she’s disappointed Tory MPs haven’t been participating in virtual meetings

Flood warning, mandatory evacuation for people in remote Alberta hamlet

A flood warning has been issued for the rain-swollen Smoky River near the Hamlet of Watino

Stop enforcing sex work laws during COVID-19, Amnesty, sex worker advocates say

‘We need to make sure the existing laws on the books aren’t enforced’

No winning ticket for Friday night’s $25 million Lotto Max jackpot

TORONTO — No winning ticket was sold for the $25 million jackpot… Continue reading

At Mount Rushmore, Trump digs deeper into nation’s divisions

MOUNT RUSHMORE NATIONAL MEMORIAL, S.D. — At the foot of Mount Rushmore… Continue reading

Most Read