UPDATE 1-CIBC profit falls 4 percent on Lehman Brothers charge
* C$148 million charge follows U.S. bankruptcy court decision
* Profit excluding items tops estimates
* Retail banking income rises
TORONTO, Feb 28 (Reuters) - Canadian Imperial Bank of Commerce reported a 4 percent drop in quarterly profit on Thursday due largely to a C$148 million charge for a legal settlement with bankrupt U.S. bank Lehman Brothers.
CIBC, Canada's fifth-largest bank, earned C$798 million (C$777 million), or C$1.91 per share, in the first quarter ended on Jan. 31, down from C$835 million, or C$1.91 per share, a year earlier.
The settlement stems from an agreement to pay the estate of Lehman Brothers Holdings Inc to resolve litigation over a collateralized debt obligation tied to the bankruptcy of the former Wall Street Bank. CIBC agreed to the settlement in December.
Stripping out that charge and other smaller items, CIBC earned C$2.15 per share, up from C$1.97 a year earlier and ahead of analysts' expectations of C$2.08, according to Thomson Reuters I/B/E/S.
Retail banking income rose to C$611 million from C$567 million, helped by loan volumes that grew despite the bank's decision last year to wind down its FirstLine discount mortgage division and focus on higher-margin loans. Continued...