Ian Bickis
The bank reported on Thursday that its second-quarter profit was $2.01 billion, up from $1.75 billion a year ago.
According to LSEG Data & Analytics, adjusted earnings were $2.05 per share, up from $1.75 last year and well above the $1.89 per share expected by stock analysts.
Like other banks in the quarter, the provision for potentially bad loans was lower than expected, which is a big source of beats as CIBC expressed confidence in its loan books.
“We are happy with the overall strength of the Canadian consumer portfolio,” Chief Risk Officer Frank Guse said on Thursday’s revenue call.
“Despite economic challenges, our credit portfolio has performed strongly and our losses remain at the low end of our guidance.”
As unemployment rates rise, the bank does see a quarter of the higher trend in credit card and personal loan writing. Guse said the bank also saw a slight increase in 90-day mortgage violations, but that was not a major issue.
“Given the strong average loan-to-value in this book, we won’t expect meaningful losses.”
The bank’s credit loss rules also reflect only moderate attention to borrowers, with CIBC raising its total terms to $605 million, up from $514 million a year ago.
While the mortgage book is not a big problem for CIBC, it focuses on growth efforts elsewhere due to the slowdown in the real estate industry and the margin is being compressed.
“When you look at the economics of the mortgage business, it’s a smaller contributor for us,” said Hratch Panossian, head of Canadian personal and business at CIBC.
“Look forward and I’ll see more.”
He said the bank is more focused on higher growth areas such as credit cards, demand deposits and investments, but mortgages remain a key product they are ready to provide to their clients.
As several segments still show growth, CIBC’s revenue totaled $7.02 billion, up from $6.16 billion.
Adjusted revenue in the capital markets sector increased by 32% in the quarter starting last year as market volatility helped push adjusted trading revenue up 48%.
As banks invest in technology, performance-based compensation and some severance expenses, the expenses are also 9% higher than the same period last year.
The bank has not violated specific numbers of how many employees it has, but says it is using strong revenue to entitle its employee base.
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Last modified: May 29, 2025
