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Restructuring charges drag down CIBC's quarterly profit to $778 million

TORONTO – CIBC (TSX:CM) reports its net income for the fourth quarter was $778 million, a 2.8 per cent decline from the same time last year due to higher restructuring costs at the corporate level.

The bank’s profit for the three months ended Oct. 31 amounted to $1.93 per CIBC common share — or $2.36 per share after excluding $161 million in restructuring expenses after taxes.

Revenue increased to nearly $3.5 billion from about $3.2 billion in the comparable period last year, up 8.4 per cent, with all three main portions of the business contributing to the increase.

CIBC’s retail and business banking operations accounted for most of the overall fourth quarter profit: $655 million — up $53 million from the same time last year.

The bank’s wealth management arm also increased its profit to $123 million from $119 million and its capital markets operations grew net income to $209 million from $136 million.

The decline in overall fourth-quarter profit was at the corporate level, where the loss grew to $209 million from $46 million.

The bank had disclosed in October at an investor day that it would take a restructuring charge of up to $200 million in the fourth quarter.

In its annual report, also issued Thursday, the company said the restructuring charges it recorded over the past year — which came to a total $225 million after tax for fiscal 2015 — related to employee severance, bank-wide efforts to improve efficiency and the sale of its banking operations in Belize.

CIBC’s total workforce was reduced by 184 full-time positions during the quarter to a total of 44,201 employees.

Excluding the restructuring and other items, CIBC’s adjusted earnings for the quarter rose to $952 million from $911 million in the fourth quarter of fiscal 2014.

For the full financial year ended Oct. 31, CIBC had $3.59 billion of net income and $7.92 billion of revenue, up from $3.22 billion of net income and $7.5 billion of revenue in fiscal 2014.

“In 2015, all three of our strategic business units delivered strong performance,” CIBC president and CEO Victor Dodig said in a statement. “Looking to 2016, I am confident that our client-focused strategy and our investment in innovation and process improvements will add long-term value for our shareholders.”

Note to readers: This is a corrected story. An earlier version had the incorrect figure for the total number of employees at the bank and the number of positions that was eliminated during the last quarter.