TORONTO – CIBC (TSX:CM) saw its second-quarter profit grow to $941 million, up 3.3 per cent from the same period last year despite an increase in provisions for soured loans to the oil and gas sector and writeoffs in its personal lending portfolios.
The profit amounted to $2.35 per share of net income, up from $2.25 or $911 million during the second quarter of 2015.
Adjusted income for the quarter ended April 30 was $962 million or $2.40 per share, compared with $924 million or $2.28 a year ago.
Quarterly revenue was $3.63 billion, up from $3.39 billion during the same period last year.
The bank also announced it is boosting its quarterly dividend by three cents to $1.21 per share, payable July 28.
The quarter included a number of ususual items including a $56-million after-tax increase in legal provisions, partly offset by a $47-million after-tax gain on the sale of a processing centre.
CIBC also increased its provisions for credit losses to $324 million from $197 million a year earlier, mainly because of higher losses in the oil and gas sector as well as the card and personal lending portfolios.
Barclays Capital analyst John Aiken says CIBC’s results were helped by a tax rate that was lower than forecast and its overall results were above expectations.
“While provisions came in higher than expected from a spike in energy provisions and consumer write-offs, CIBC did manage to earn through the headwinds and we do not believe that there will be an overly abundant amount of concern in the quarter as the bank’s energy reserve level stands above two per cent and consumer delinquencies appeared to have eased,” Aiken wrote in a research note.
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