Canadian Imperial Bank of Commerce

beat analysts’ expectations on Thursday as the lender posted double-digit net income growth across each of its business segments.

CIBC’s net income for the three months ending July 31 was $2.1 billion, up 17 per cent from the $1.8 billion it posted a year ago, resulting in net earnings per share of $2.15.

Its adjusted net income — which removes the impact of non-recurring items — was $2.1 billion, compared to $1.9 billion last year, resulting in adjusted earnings per share of $2.16, which beat analysts’ expectations of about $2.01 per share.

“Our client focus and execution mindset has culminated into another clean quarter with strong performance across all of our business units,” chief executive Victor Dodig, who is retiring in November after spending a decade at the top post, said on a conference call on Thursday. “We’re resilient and we’re prepared for shifts in economic conditions.”

Canada’s Big Six lenders are releasing their earnings this week, with Bank of Montreal, Bank of Nova Scotia and

Royal Bank of Canada

previously beating analysts’ expectations, while National Bank of Canada fell slightly short.

The heads of most banks so far have said there seems to be more certainty in the economy compared to the start of the year, when Canada was in the process of electing a new government and details regarding Donald Trump’s tariffs were scarce.

Still, uncertainty persists and most CEOs believe the renewal of Canada’s new trade deal with the United States will play a key role going forward.

“Global trade tensions may result in slower growth and higher inflation in many countries, including Canada and the United States,” Dodig said. “However, we anticipate that declining interest rates will help support economic growth, while fiscal policy will offer targeted relief to the sectors most affected by trade negotiations.”

Given the uncertainty surrounding tariffs, analysts are closely monitoring the provisions for credit losses (PCLs), the reserves lenders set aside to address potentially problematic loans, a key metric for measuring the health of a bank’s loan book as well as the ability of households and businesses to pay their debts.

Both BMO and Scotiabank reported lower PCLs, while RBC PCLs were higher, but lower than what analysts expected.

CIBC’s total PCLs were $559 million, up $76 million from the same quarter last year, but within the expectations of some analysts. For example, Canaccord Genuity Group Inc.’s Matthew Lee expected its PCLs to be $588 million.

“CIBC’s strong earnings did not benefit from a decline in provisions to the same degree as its peers, elevating the quality of its earnings, in our opinion,” John Aiken, an analyst at Jefferies Inc., said in a note on Thursday.

CIBC’s Canadian personal and business banking segment had a net income of $812 million for the quarter, up 17 per cent from a year ago, while its commercial and wealth management segment posted a $598-million profit, up 19 per cent from last year.

The bank’s biggest increase in net income, though, came in the capital markets segment, which was $540 million, up $251 million, or 87 per cent, from a year ago.

  • Banks expected to have kept aside less money
  • CIBC hires Mark Mulroney from Scotiabank

All the increases were due to higher revenues.

Mike Rizvanovic, an analyst at Bank of Nova Scotia, described CIBC’s quarter as “strong and clean” overall.

CIBC also announced it will buy up to 20 million common shares, subject to the approval of the Toronto Stock Exchange, and will pay a dividend of $0.97 per share for the quarter ending Oct. 31.

This was the final earnings call for Dodig as CEO, as he will be replaced by Harry Culham, the bank’s chief operating officer.

“Victor has transformed our bank and will leave behind a remarkable legacy that will continue to inspire us all,” Culham said on the call.

• Email: nkarim@postmedia.com