CIBC posts $852-million profit for fourth quarter, beats consensus estimate

TORONTO – CIBC (TSX:CM) earned $852 million in the fourth quarter, an increase of nearly $100 million from the same time last year that the bank’s CEO says reflects the strength of its strategic focus on its core businesses.

“CIBC reported another year of solid progress in 2012,” Gerry McCaughey, CIBC president and chief executive, said in a statement.

The bank’s overall the profit amounted to $2.02 per share of earnings, before adjustments. On an adjusted basis, CIBC’s fourth-quarter profit amounted to $2.04 per share — six cents above the average analyst estimate.

Revenue totalled $3.16 billion, up from $3.2 billion a year ago.

Analysts had expected on average the bank would have adjusted earnings of $1.98 per share and revenue of $3.2 billion in the fourth quarter, according to estimates compiled by Thomson Reuters.

CIBC said its fourth quarter had several one-time items that collectively reduced its earnings by two cents per share. The year-ago results included one-time items that added a penny per share.

Among the one-time items in the most recent quarter was a $24-million gain ($19 million after tax) on the sale of its interests in relation to the Maple Group’s acquisition of TMX Group Inc. (TSX:X), which operates Canada’s largest stock and derivatives markets.

CIBC also recorded $57 million ($32 million after tax) on loan losses from its U.S. leveraged finance portfolio.

Provisions for credit losses for the fourth quarter amounted to $328 million up $22 million from the fourth quarter of 2011.

Retail and business banking earned $569 million in the quarter, down from $597 million a year ago, while wealth management earned $84 million, up from $70 million.

Wholesale banking earned $193 million, up from $122 million in the fourth quarter of 2011.

The fourth quarter brought the total net income for CIBC’s 2012 financial year to $3.3 billion, before adjustments — up $400 million from last year.

Revenue for the full year totalled $12.55 billion, up from $12.44 billion.

By far the largest portion of CIBC’s profit last year came from retail and business banking, which provided $2.3 billion of net income for the year ended Oct. 31, — up from $2.2 billion in 2011.

“As we close fiscal 2012, our business is well positioned for growth,” David Williamson, CIBC’s head of retail and business banking.

“We have re-positioned our focus towards building deeper relationships with our clients, built more branches, extended our branch operating hours, launched new products and reinforced our leadership position in mobile banking with our launch of mobile payments.”