CIBC (TSE:CM) Reports Third Quarter 2024 Earnings
CIBC reported robust financial results for the third quarter of 2024, demonstrating strong growth across key metrics.
The bank’s revenue reached $6,604 million, marking a 13% increase year-over-year. Reported net income rose to $1,795 million, up 25% compared to the same period last year.
Adjusted net income, a measure that excludes one-off costs, showed even stronger growth at $1,895 million, representing a 28% increase from Q3 2023. This performance translated to adjusted diluted earnings per share of $1.93, up 27% year-over-year.
The bank’s profitability metrics also improved, with reported return on common shareholders’ equity (ROE) reaching 13.2% and adjusted ROE hitting 14.0%.
CIBC’s balance sheet strength was evident in its Common Equity Tier 1 (CET1) ratio, which stood at a healthy 13.3% as of July 31, 2024. This represents an improvement from both the previous quarter and the same period last year, reflecting the bank’s solid capital position.
The bank’s performance across its core business segments was generally positive:
- Canadian Personal and Business Banking:
- Net income: $628 million (up 26% year-over-year)
- Growth driven by higher revenue and lower credit loss provisions
- Canadian Commercial Banking and Wealth Management:
- Net income: $468 million (slight increase from last year)
- Higher fee-based revenue offset by lower deposit margins in commercial banking
- U.S. Commercial Banking and Wealth Management:
- Net income: $215 million (US$158 million), up 187% year-over-year
- Significant improvement due to lower credit loss provisions and higher revenue
- Capital Markets and Direct Financial Services:
- Net income: $388 million (down 21% year-over-year)
- Decline attributed to higher non-interest expenses and credit loss provisions
It’s worth noting that CIBC’s results were affected by several items of note, including an $88 million charge related to a new Federal tax measure and smaller charges for intangible asset amortization and a special assessment by the U.S. Federal Deposit Insurance Corporation.
CIBC’s President and CEO, Victor G. Dodig, attributed the strong results to the bank’s client-focused strategy and the diversification of its North American platform. He emphasized the bank’s success in deepening client relationships and maintaining a strong balance sheet.
The bank’s net interest margin on average interest-earning assets showed a slight improvement, reaching 1.50% compared to 1.49% in the same quarter last year. When excluding trading activities, this margin was even higher at 1.84%, up from 1.67% in Q3 2023.
CIBC’s liquidity position remained strong, with a liquidity coverage ratio of 126% as of July 31, 2024. This indicates the bank’s ability to meet short-term obligations in a stressed scenario.
These results suggest that CIBC is navigating the current economic environment effectively, leveraging its diversified business model to deliver value to its stakeholders. The bank’s focus on client relationships and strategic initiatives appears to be yielding positive outcomes across most of its business segments.