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Canadian Imperial Bank of Commerce (CM-T), the country’s fifth-largest bank, said profit rose nearly 23 percent in the first quarter, driven by profit at its retail banking operations and lower loan-loss provisions.
The bank reported profit of $799 million, or $1.92 a share, compared to a profit of $652 million, or $1.58 a share, for the same period a year ago.
The results beat analysts expectations. Excluding one-time items, the bank’s profit was $1.97 a share, about 20 cents a share higher than what analysts were forecasting. CIBC is the first of Canada’s major banks to report earnings for the quarter.
The retail banking operations, comprised of its branches and credit card business, reported income of $627 million for the quarter, up 19 percent from $527 million a year ago. However, profit at CIBC’s wholesale banking division fell 26 percent, dropping to $136 million from $184 million last year.
Provisions for credit losses had a positive impact on earnings as the economy improved and the bank set aside less money to cover bad loans. Credit loss provisions fell to $209 million from $359 million a year ago.
Net interest income, the revenue the bank gets on lending and deposits, rose 6 percent in the quarter, climbing to $1.61 billion from $1.51 billion. It was boosted by CIBC’s expansion of its credit card portfolio last year through the acquisition of Citigroup’s MasterCard portfolio in Canada, the bank said.
The bank’s return on equity was 23.3 percent for the quarter. Its tier-one capital position improved to 14.3 percent, from 13.9 percent in the previous quarter.