Canadian Imperial Bank of Commerce is reporting a lower results for the second quarter ended April 30.

The bank says its profits fell due to exposure to the telecoms sector, weak capital markets and lower merchant banking revenue.

Net income for the quarter was $235 million, or 53¢ a share, down from $355 million, or 87¢ a share diluted a year ago.

Adjusted earnings per share, which excludes unusual items, was $276 million, or 64¢, fully diluted.

Return on equity fell to 8.3%from 18.4%. On an adjusted basis, it was 10%, down from 17.1%.

Revenue was $2.9 billion, up $235 million from the second quarter of 2001.

CIBC, along with other banks, has taken a hit on its exposure to Teleglobe Inc, which obtained bankruptcy protection last week.

“Our second quarter earnings were affected by weakness in capital markets, corporate loan loss provisions and lower merchant banking net revenue,” says John Hunkin, chairman and CEO. “The solid performance of our retail businesses helped offset the weakness in wholesale markets. These businesses, comprising Retail Products, Retail Markets and Wealth Management, continued to deliver strong returns on equity with consumer deposits, mortgages and personal lending recording strong quarter over quarter growth.”

The is eliminating more than 100 positions in CIBC World Markets, primarily in the U.S.. As well, it is taking writedowns in the merchant banking portfolio.

Fee-based assets at CIBC Wood Gundy grew by 135% fiscal year-to-date, thanks to the acquisition of the retail brokerage operations of Merrill Lynch Canada Inc. The growth rate excluding acquisitions was 51% excluding acquisitions.

CIBC Imperial Service continued to gain competitive advantage in Canadian retail banking by licensing its branch-based financial advisors with the Investment Dealers Association of Canada.

At quarter end, more than 600 financial advisers were licensed to advise on and sell third party and CIBC investment products.