February 23, 2017 / 1:03 PM / a year ago

UPDATE 2-CIBC beats forecasts with 13 percent rise in Q1 profit

* Earnings per share C$2.89 vs forecast C$2.59

* Lifts dividend for 9th time in last 10 quarters (Adds analyst comment, details)

By Matt Scuffham

TORONTO, Feb 23 (Reuters) - Canadian Imperial Bank of Commerce, Canada’s fifth-biggest lender, on Thursday reported a 13 percent rise in quarterly earnings, beating market forecasts, helped by growth in its retail and capital markets businesses.

Adjusted net income for the first quarter to Jan. 31 rose to C$1.17 billion ($889 million), or C$2.89 per share, after excluding one-off items such as restructuring charges and gains on the sale and leaseback of retail properties.

That surpassed the average analyst forecast of C$2.59 per share, according to Thomson Reuters I/B/E/S.

“CIBC delivered strong performance across retail and business banking, wealth management and capital markets,” Chief Executive Victor Dodig said in a statement.

The bank said its retail and business banking division earned adjusted net income of C$709 million, up from C$686 million a year earlier, while its capital markets business reported adjusted net income of C$371 million, up from C$244 million.

Total revenue was C$4.2 billion, compared with C$3.6 billion a year ago.

The bank also said it would increase its quarterly dividend by C$0.03 per share to C$1.27 per share, the ninth time in the last 10 quarters it has increased its dividend.

CIBC’s core tier 1 capital, a key measure of its financial strength, rose by 60 basis points from the previous quarter to 11.9 percent, the highest of any major Canadian bank.

“We view Q1 results positively as revenues, efficiency and loan losses were all better than our forecast,” said RBC banking analyst Darko Mihelic. He added that the bank’s capital was strong, and the quarterly dividend increase announcement was unexpected.

CIBC did not provide an update on its C$3.8 billion offer for Chicago-based PrivateBancorp. A shareholder vote on the takeover was delayed in December after some PrivateBancorp shareholders said they would reject the proposal.

$1 = 1.3155 Canadian dollars Reporting by Matt Scuffham; editing by Jane Merriman, Jason Neely and W Simon

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