CIBC reports better-than-expected profit, raises dividend
By Amrutha Gayathri
(Reuters) - Canadian Imperial Bank of Commerce (CM.TO: Quote) (CM.N: Quote) reported a better-than-expected quarterly profit on Thursday, boosted by higher client trading, and raised its dividend for the third straight quarter.
The quarterly dividend increase of 3 Canadian cents per share to C$1.09 pushed the bank's shareholder payout ratio to the higher end of its target of 40-50 percent of earnings.
On an adjusted basis, net income attributable to shareholders rose to C$2.28 per share in the second quarter ended April 30. Analysts on average had expected C$2.23 per share, according to Thomson Reuters I/B/E/S.
Net income in its wholesale banking unit rose about 17 percent to C$250 million.
"Trading and underwriting revenues can be volatile, so it's hard to say they will continue to be as strong as recently reported," Edward Jones analyst James Shanahan said.
Net income in the bank's retail and business banking division, its biggest, rose 6.8 percent to C$583 million due to volume growth and higher fees.
The bank reported C$25 million in impaired loans and provided for C$10 million in credit losses for the energy sector.
However, Chief Risk Officer Laura Dottori-Attanasio said on a conference call that credit quality of the bank's commercial and corporate energy portfolio and retail portfolios affected by oil prices "remained relatively stable". Continued...