The Canadian Press

CIBC (TSX:CM) opened the first-quarter earnings season of Canadian banks Thursday with big increases in revenue and profit compared with last year.

The Toronto-based bank, which is holding its annual meeting in Montreal, reported that profit for the quarter ended Jan. 31 was $652 million.

A large chunk of the earnings for the quarter came from CIBC’s Canadian consumer banking division.

Earnings were $1.58 per diluted share, an increase from $147 million or 29¢ per share a year ago.

CIBC’s first-quarter revenue also grew to $3.06 billion, up from $2.02 billion in the first quarter of fiscal 2009.

“We continued to build capital while investing across our business, and we maintained strong expense discipline,” said president and CEO Gerry McCaughey in a release.

“We also took advantage of improving credit markets by reducing positions in our structured credit run-off and other legacy portfolios.”

McCaughey told shareholders the bank’s goal is to deliver consistent and sustainable earnings over the long term.

“By doing so, we believe CIBC can earn a premium valuation over time.”

Loan-loss provisions, the amount banks set aside to deal with money they may lose on loans that aren’t repaid in full, rose to $365 million from $278 million a year ago mostly on higher writeoffs and bankruptcies in its credit cards, and also lending losses at FirstCaribbean International Bank.

The provisions were lower, however, compared to the previous quarter ended Oct. 31, when CIBC set aside $424 million.

In its capital markets division, the bank reported that trading revenue grew 6% to $277 million.

“We fully expect CIBC’s valuation to benefit significantly from what are admittedly very strong results,” said Barclays Capital analyst John Aiken in a note after the bank’s announcement.

“Further, we believe that the market will — quite rightfully — extrapolate these positive results to the other banks and generate a lift to the sector as positive credit and net interest income stories are likely transferable,” Aiken wrote.

“That said, we have seen in recent quarters that early positive results have not necessarily been replicated by each bank that subsequently reports.”

CIBC board chairman Charles Sirois told shareholders the bank had reduced its range of pay for senior executives, as well as the potential for swings in compensation pay from one year to the next.

One shareholder said that when there is too large a gap between executive pay and what other employees earn it creates a “malaise” in the business and in society.

Shareholders were to vote on a non-binding resolution on executive pay at the meeting.

CIBC stock was up $1.69 or more than 2.3% at $69.43 late morning Thursday on the Toronto Stock Exchange with almost 1.4 million shares traded.