Divide emerges as big banks cope with strained consumers.

Canadian Imperial Bank of Commerce reported its third-quarter profit rose compared with a year ago as it set aside less money for bad loans, bucking a trend seen this quarter among other banks.

CIBC said Thursday its net income totalled $1.80 billion in for the quarter ended July 31, up from $1.43 billion in the same quarter last year.

Revenue totalled $6.60 billion, up from $5.85 billion.

CIBC’s provision for credit losses for the quarter amounted to $483 million, down from $736 million a year earlier.

“While tighter monetary policy has slowed demand for loans in the industry on both sides of the border this year, we’re expecting business activity to pick up through 2025 amid further interest rate relief and stronger economic growth,” said CIBC chief executive Victor Dodig on the bank’s call with analysts.

Dodig said while commercial clients are “feeling more buoyant” after the Bank of Canada slashed its key interest rate in both June and July, consumers are still “more tentative when it comes to borrowing.”

CIBC chief risk officer Frank Guse added the bank continues to have a “prudent outlook on credit performance overall,” with unemployment remaining a headwind.

Canada’s unemployment rate has steadily risen over the past year and sat at 6.4% as of July, Statistics Canada data shows.

“It’s very hard to say when exactly that will peak and get better. We don’t expect it to go up dramatically and that’s what you see in our outlook and in our provisioning,” said Guse.

“We continue to expect this to be a headwind and then over time, interest rates will have a positive impact and will mitigate some of that pressure, but that will be lagging a little bit as well.”

Jefferies analyst John Aiken called it a strong quarter for CIBC, noting it was one of three banks to come in “well ahead of consensus’ expectations” over the three-month period.

CIBC’s Canadian personal and business banking unit earned $628 million in its latest quarter, up from $499 million in the same quarter last year, helped by higher revenue and a lower provision for credit losses, partially offset by higher expenses.

The bank’s Canadian commercial banking and wealth management segment earned $468 million, up from $467 million a year earlier, while its U.S. commercial banking and wealth management business earned $215 million, up from $73 million a year ago.

CIBC’s capital markets and direct financial services unit earned $388 million for the third quarter, down from $494 million in the same quarter last year.

The bank’s corporate and other unit reported a profit of $96 million in its latest quarter compared with a loss of $101 million a year ago.