CIBC Q3 earnings rise 25% to $1.37B

Canadian Imperial Bank Of Commerce raised its quarterly dividend as it reported a third-quarter profit of $1.37 billion, a 25 per cent increase from the same period in 2017.

RBC kicked off bank earnings yesterday with an 11 per cent increase in third quarter profit.

CIBC says it will now pay a quarterly dividend of $1.36 per share, up from $1.33.

The increased payment to shareholders came as CIBC says it earned $3.01 per diluted share for the quarter ended July 31 compared with a profit of $1.1 billion or $2.60 per share a year ago.

On an adjusted basis, CIBC says it earned $3.08 per diluted share for the quarter, up from an adjusted profit of $2.77 per diluted share in the same quarter last year.

Analysts on average had expected a profit of $2.94 per share for the quarter, according to Thomson Reuters Eikon.

CIBC chief executive Victor Dodig says the bank delivered solid performance across all of its businesses.

"We are executing well on our strategy to build a relationship-oriented bank for a modern world, while delivering strong and consistent returns and growth to shareholders," Dodig said in a statement.

"We are pleased with the momentum that our North American platform is gaining as we find new ways to serve our clients on both sides of the border."

Plans to stick with Aeroplan

Speaking to analysts later, Dodig said CIBC expects to continue as an Aeroplan points partner after 2020, even though its own Aventura loyalty program is growing well.

CIBC is a member of an Air Canada-led consortium that reached a tentative agreement this week to acquire Aeroplan by paying $450 million to Aimia Inc. and assuming $1.9 billion in points liabilities.

The future of Aeroplan has faced questions since Air Canada announced last year that it planned to launch its own loyalty rewards plan in July 2020, when its partnership with Aimia expires.

Asked by an analyst whether CIBC would continue to be an Aeroplan partner after 2020, Dodig replied: "I think so. Absolutely."

"In the end, our clients hold a lot of these loyalty points," he said.

There are still details to be worked out among members of the consortium, which includes TD and Visa Canada, but Dodig said CIBC is comfortable with the economics and believes that the capital impact is "small and manageable."

Both Canadian and U.S. divisions improve results

Almost all segments of the bank's business enjoyed improved results, including Canadian personal and small business banking group, which earned $639 million in the quarter, up 14 per cent compared with the same quarter last year.

Canadian commercial banking and wealth management earned $350 million, up 20 per cent compared with a year ago.

Meanwhile, U.S. commercial banking and wealth management earned $162 million, up $121 million compared with year ago, boosted by its acquisition of PrivateBancorp.

CIBC's capital markets business earned $265 million for the third quarter, up five per cent from the same quarter last year.