CIBC, National top estimates, shares rise

Thu May 31, 2012 3:54pm EDT
 
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By Cameron French

TORONTO (Reuters) - Canadian Imperial Bank of Commerce (CM.TO: Quote) and National Bank of Canada (NA.TO: Quote) capped off Canadian second-quarter bank results on a strong note on Thursday, exceeding estimates and sending their shares higher.

Shares of CIBC, Canada's No. 5 bank, jumped 2.2 percent to a two-week high after the company reported a 6 percent increase in net profit due partly to higher loan volumes.

Core profit was C$2.00 a share, topping estimates of C$1.88 a share. Analysts pegged the beat to strong cost containment coupled with modest growth in loans.

"CIBC managed to generate bank-wide operating leverage, despite a modest decline in core revenues as expenses in the quarter declined 1.5% sequentially. This is a strong performance and has been a consistent theme for CIBC for several quarters," Barclays Capital analyst John Aiken said in a note.

Smaller rival National Bank of Canada said core profit rose 6 percent, also beating estimates on stronger consumer loan and mortgage growth. The company raised its quarterly dividend by 5 percent.

National's stock pushed up 1 percent.

CIBC LOAN GROWTH

The results wrap up a quarter in which Canada's six biggest banks' earnings were largely ahead of expectations, but not to the same degree as in recent quarters.   Continued...