<\/p>\n
Divide emerges as big banks cope with strained consumers.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Revenue totalled $6.60 billion, up from $5.85 billion.<\/p>\n
CIBC\u2019s provision for credit losses for the quarter amounted to $483 million, down from $736 million a year earlier.<\/p>\n
\u201cWhile tighter monetary policy has slowed demand for loans in the industry on both sides of the border this year, we\u2019re expecting business activity to pick up through 2025 amid further interest rate relief and stronger economic growth,\u201d said CIBC chief executive Victor Dodig on the bank\u2019s call with analysts.<\/p>\n
Dodig said while commercial clients are \u201cfeeling more buoyant\u201d after the Bank of Canada slashed its key interest rate in both June and July, consumers are still \u201cmore tentative when it comes to borrowing.\u201d<\/p>\n
CIBC chief risk officer Frank Guse added the bank continues to have a \u201cprudent outlook on credit performance overall,\u201d with unemployment remaining a headwind.<\/p>\n
Canada\u2019s unemployment rate has steadily risen over the past year and sat at 6.4% as of July, Statistics Canada data shows.<\/p>\n
\u201cIt\u2019s very hard to say when exactly that will peak and get better. We don\u2019t expect it to go up dramatically and that\u2019s what you see in our outlook and in our provisioning,\u201d said Guse.<\/p>\n
\u201cWe 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.\u201d<\/p>\n
Jefferies analyst John Aiken called it a strong quarter for CIBC, noting it was one of three banks to come in \u201cwell ahead of consensus\u2019 expectations\u201d over the three-month period.<\/p>\n
CIBC\u2019s 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.<\/p>\n
The bank\u2019s 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.<\/p>\n
CIBC\u2019s capital markets and direct financial services unit earned $388 million for the third quarter, down from $494 million in the same quarter last year.<\/p>\n
The bank\u2019s corporate and other unit reported a profit of $96 million in its latest quarter compared with a loss of $101 million a year ago.<\/p>\n
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