(March 1 – 10:10 ET) – CIBC is reporting improved results for the first quarter ended January 31.

Earnings from operations were $612 million, excluding non-recurring items and the net impact of Amicus, CIBC’s electronic banking subsidiary. That’s a 28% increase from the same period a year ago.

Reported earnings, including the impact of a change in the Canadian federal tax rate and CIBC’s investment in Amicus, were $515 million or $1.26 a share on a fully diluted basis, up 22%, and return on equity was 20.1%.

The bank’s Tier 1 capital ratio rose to 9.1% and its total capital ratio to 12.5%. Risk weighted assets declined by $300 million from the previous quarter to $132.6 billion. CIBC increased its specific provision for credit losses to $190 million from $143 million a year ago, although it says gross impaired loans remained relatively stable. “Our increasingly cautious view of credit market conditions led us to increase our specific provision for credit losses for the quarter,” it says.

“CIBC’s success during the quarter reflected disciplined cost control and strong performance across all lines of business,” said John Hunkin, chairman and CEO of CIBC, but he spoke quite cautiously of the bank’s prospects for the year.

“We are off to a good start in fiscal year 2001, but we will continue to manage our businesses prudently, with a view to more challenging market conditions. We will remain vigilant regarding expense and credit conditions. We will also continue to concentrate on growth strategies in Amicus and elsewhere that we believe will create the greatest value for shareholders.”

In the first quarter, Retail and Small Business Banking contributed 25% of the bank’s total earnings. Earnings were up 38% year-over-year and return on equity for the quarter was 33.1%. Wealth Management reported a return on equity of 100.7%, as the group contributed 21% of the bank’s total earnings in the quarter. Strong trading and merchant banking revenue allowed CIBC World Markets to generate a return on equity ROE of 23.4% during the quarter.

CIBC revenue totalled $2.95 billion, up $173 million from the first quarter of 2000. CIBC World Markets revenue was up $229 million from one year ago and Electronic Commerce and Retail and Small Business Banking also posted revenue growth. Wealth Management revenue was down primarily due to lower annual incentive fees, weaker markets and reduced trading volumes. Non-interest expenses were $1,985 million, up $12 million from the first quarter of 2000 and down $46 million from the prior quarter.
-IE Staff