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CIBC Earnings Beat Expectations After PrivateBancorp Purchase

Canadian Imperial Bank of Commerce beat revenue and earnings estimates in its latest quarter as it completed its $5 billion acquisition of PrivateBancorp Inc.

Toronto-based CIBC said Thursday net income dropped from a year ago to 1.1 billion Canadian dollars ($880 million) from C$1.44 billion. But excluding one-time items such as purchase costs and legal fees, CIBC's net income rose 9% year-over-year.

CIBC reported adjusted earnings per share of C$2.77, compared with C$2.67 a share a year ago. The bank's adjusted revenue rose 8% to C$4.13 billion ($3.3 billion), while unadjusted revenue dropped 1%. Analysts polled by Thomson Reuters were expecting C$2.66 in adjusted earnings per share on C$3.98 billion in revenue.

Losses in the bank's U.S. real estate finance portfolio prompted CIBC to increase its provision for credit losses to C$209 million in its latest quarter, a 3% rise from a year ago when adjusted for nonrecurring items.

Net interest income grew 8% to C$2.28 billion and fee-based income dropped 10% to C$1.83 billion.

In the latest period, earnings from retail and business banking rose 8% as the bank increased volume, especially on residential mortgages, and charged higher fees.

Canadian wealth-management profit rose 10%, driven by growing asset balances and higher commissions, when adjusted to exclude the impacts of a C$383 million gain from an investment sale a year ago.

Capital-markets adjusted earnings dropped 13% due to lower trading revenues and lower equity underwriting revenue.

U.S. commercial banking and wealth-management net income rose 74% from a year ago as the bank integrated PrivateBank's results into the quarter. PrivateBank is based on Chicago.

CIBC's takeover of Chicago-based PrivateBancorp closed in late June, ending a turbulent monthslong pursuit. The bank incurred a C$38 million charge in the quarter related to transaction and integration costs.

The bank also plans to buy Geneva Advisors, a wealth-management firm based in Chicago, in a deal expected to close in its fourth quarter. CIBC will pay up to $200 million, depending on performance.

(END) Dow Jones Newswires

August 24, 2017 07:40 ET (11:40 GMT)