CIBC Q1 profit tops estimates

Thu Feb 25, 2010 8:05am EST
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TORONTO/BANGALORE (Reuters) - Canadian Imperial Bank of Commerce posted quarterly profit that more than quadrupled, helped by volume growth in its retail markets and wholesale banking, handily beating market estimates.

Canada's fifth-largest bank said net profit rose to C$652 million, or C$1.58 a share, for the first quarter ended January 31.

That compares with C$147 million, or 29 Canadian cents a share, for the same quarter a year before, when CIBC took a charge on structured credit run-off activities and mark-to-market losses on hedges related to leveraged leases, among other losses.

The company reported cash earnings of C$1.60 per share, while analysts on average were expecting C$1.41, according to Thomson Reuters I/B/E/S.

Barclays Capital analyst John Aiken said lower-than-expected loan loss provisions and surprisingly elevated trading revenues boosted CIBC's earnings, setting the stage for a rally in the stock -- and bank shares more broadly -- when trading opens in Toronto.

"We fully expect CIBC's valuation to benefit significantly from what are admittedly very strong results. Further, we believe that the market will (quite rightfully) extrapolate these positive results to the other banks and generate a lift to the sector as positive credit and net interest income stories are likely transferable," Aiken said in a note to clients.

Shares of the Toronto-based CIBC closed at C$67.82 Wednesday on the Toronto Stock Exchange.

CIBC's Wholesale Banking business earned C$184 million for the quarter.

Total revenue rose to C$3.06 billion from C$2.O2 billion a year before.   Continued...

<p>A sign is pictured outside a Canadian Imperial Bank of Commerce branch in Ottawa August 26, 2009. REUTERS/Chris Wattie</p>