Canadian Imperial Bank of Commerce (CIBC) (TSX: CM) reports better than expected third quarter results, hikes dividend by 2.4%
SmallCapPower | August 25, 2017: Canadian Imperial Bank of Commerce (CIBC) (TSX: CM) Thursday reported its Q3’17 results. Net income came in lower by 23.9% at $1,097 million, compared with $1,441 million for the third quarter a year ago. Sequentially, net income rose 4.5% from $1,050 million for the preceding quarter. Adjusted net income was up 8.8% to $1,166 million, compared with $1,072 million for the third quarter a year ago.
Shares of CIBC fell nearly 2% to close at C$105.57 on Thursday.
Canadian retail and business banking segment reported higher net income by 8% to $719 million for the third quarter on the back of solid volume growth and higher fees partially offset by narrower spreads and higher spending on strategic initiatives.
Canadian wealth management segment’s net income nosedived 73% to $136 million for the third quarter, as the third quarter last year included exceptional gain of $383 million. Excluding this gain, adjusted net income grew 10% YoY.
U.S. commercial banking and wealth management segment’s net income surged 74% to $40 million for the third quarter and capital markets reported lower net income of $252 million for the third quarter, down 10% YoY due to lower equity derivatives and interest rate trading and lower equity underwriting revenue, partially offset by higher corporate banking revenue and investment portfolio gains.
Adjusted diluted EPS came in at $2.77, compared with $2.67 for the third quarter a year ago. Return on common shareholders’ equity (ROE) was 16.3% and adjusted ROE was 17.3%. CIBC declared a dividend of $1.30 per share on common shares, an increase of 2.4% from the previous quarter.
CIBC pays the highest dividend yield amongst Canada’s Big 5 Banks at nearly 5%, although its stock performance has historically underperformed its peer group.
CIBC stock trades at a Price to Book multiple of 1.72x and a Price to Earnings (TTM) multiple of 8.80x.
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