CIBC announced net income of $807 million for the second quarter ended April 30, up from $585 million for the same period last year. Diluted earnings per share were $2.27, up from $1.63 a year ago. Return on equity for the second quarter was 28.9%, up from 25.7% for the same period last year.

CIBC’s Tier 1 capital ratio at April 30, was 9.5%, up from 9.2% a year ago. Diluted EPS of $2.27 for the second uarter of 2007 were increased by:
– $80 million ($0.24 per share) tax recovery related to the favourable resolution of an income tax audit in CIBC Retail Markets.
– $24 million reversal of the general allowance for credit losses.
– $11 million reversal of a portion of the valuation allowance related to a future tax asset from CIBC’s U.S. operations.
– $10 million ($7 million after-tax, or $0.02 per share) due to the impact of changes in credit spreads on the mark-to-market of corporate loan credit derivatives.

CIBC’s net income and diluted EPS were up from net income of $770 million and diluted EPS of $2.11 for the prior quarter, which included items of note aggregating to a decrease in earnings of $0.06 per share.

“Our second quarter results were strong, and reflect continued progress against our priorities and objective of consistent and sustainable performance,” says Gerald T. McCaughey, president and CEO.

CIBC’s first priority is to sustain and enhance the strength of its core businesses. As such, CIBC Retail Markets reported revenue of $2.19 billion, up from $2.15 billion for the prior quarter and almost $2 billion for the same period last year. Net income for the second quarter was $583 million, up 35% from a year ago. Volume growth, lower taxes and the acquisition of a controlling interest in FirstCaribbean International Bank contributed to this result.

CIBC Retail Markets’ results for the second quarter include the consolidated second quarter results of FirstCaribbean. On Feb. 2, CIBC announced the purchase of an additional 8.5% interest in FirstCaribbean, increasing CIBC’s ownership to approximately 91.5%.

While the environment in Canada remains competitive, CIBC’s retail businesses continue to perform well overall and remain strongly positioned in the market. CIBC’s credit cards business is the market leader in Canada and continues to grow in line with expectations. Card loans administered were up 10.6% from the second quarter of last year. CIBC Wood Gundy’s assets under administration surpassed $120 billion in the quarter. Mutual funds and managed accounts assets under management grew to $61.1 billion in the quarter, up 9.7% from a year ago. CIBC had market share increases during the quarter in key areas such as mortgages, deposits and fixed term investments.

In the area of personal lending, CIBC’s focus on credit quality has been reflected in improved loan loss performance over the past year, but lower revenue growth than the market. As the actions CIBC has taken to improve its risk profile run their course, CIBC expects its personal lending business to resume overall revenue growth converging on industry levels.

CIBC World Markets reported another strong quarter. Revenue of $726 million was down from $784 million in the prior quarter, but up from $607 million for the same period last year. Net income for the second quarter was $194 million, up 76% from a year ago.

CIBC’s second priority is to improve productivity. CIBC’s target in 2007 is to hold expenses flat to Q4 2006 levels, excluding the FirstCaribbean acquisition, by absorbing normal inflationary increases to its cost base. Expenses for the second quarter of almost $2 billion were up from $1.9 billion in the prior quarter, primarily due to the impact of a full quarter of consolidation of FirstCaribbean’s results. CIBC’s second quarter expenses included $99 million related to FirstCaribbean, compared with $33 million in the prior quarter. The higher FirstCaribbean expenses were partially offset by the impact of three fewer days in the second quarter.

CIBC’s efficiency ratio for the second quarter improved to 64.8% from 66.1% for the same period last year. CIBC’s cash efficiency ratio for the second quarter improved to 63.2% from 64.9% a year ago.

“Our second quarter results reflect the balance we are seeking between expense constraint and revenue growth,” says McCaughey. “We believe that the impact of improved revenue through consistent investment in our core businesses and continued expense discipline is the most balanced way to achieve further productivity improvements.”

@page_break@CIBC’s third priority is balance sheet strength and capital usage. CIBC’s Tier 1 ratio of 9.5% remains above its medium term target of 8.5%. CIBC’s capital usage plans are first to invest in core businesses, then balance remaining deployment opportunities.

“With the FirstCaribbean acquisition now complete, CIBC will consider further opportunities for international growth, both through organic expansion at FirstCaribbean and additional strategic acquisitions,” says McCaughey. “CIBC will balance these opportunities with capital returns to shareholders.”

In related news, CIBC’s board of directors declared a dividend of 77¢ per share on common shares for the quarter ending July 31 payable on July 27 to shareholders of record at the close of business on June 28.

Other dividends per share for the quarter ending July 31, payable on July 27 to shareholders of record at the close of business on June 28, were declared as follows:

Series 18 – $0.343750
Series 19 – $0.309375
Series 23 – $0.331250
Series 25 – $0.375000
Series 26 – $0.359375
Series 27 – $0.350000
Series 28 – $0.020000
Series 29 – $0.337500
Series 30 – $0.300000
Series 31 – $0.293750
Series 32 – $0.281250