Investment banking and credit problems may be the big reason for CIBC’s earnings slide, but wealth management had a tough quarter, too.

The wealth management division’s net income for the quarter was $75 million, down $33 million from the second quarter of 2000, and down $35 million from the prior quarter “due to lower revenue earned by market sensitive business lines”.

Revenue totalled $561 million, down $145 million from the second quarter of 2000 and down $5 -million from the prior quarter. “Weaker market conditions reduced both transaction-based revenue and fee-based revenue earned on market valued assets.”

The division is handily trumping its target for more than 50% return on equity. ROE for the quarter was 75%, and in the year to date it is 88%. However, it is falling far short of its target to increase GIC market share by 20 basis points for the year, with market share down 14 bps from October 2000.

It targeted a 6% increase in total wealth management assets under administration, but assets are down 4% from October. It hopes to grow index mutual fund assets by 15% for the year, so far it is up 8%.

The Imperial Service group saw revenue of $160 million for the quarter, up $26 million from the second quarter of 2000 due to increased business volumes and renegotiated revenue allocations earned on discount brokerage services. Revenue was up $17 million from the prior quarter.

Private client investment and asset management saw its revenue come in at $267 million, down $112 million from the second quarter of 2000 due to lower market trading activity, and down $27 million from the prior quarter.

Global private banking revenue slipped to $30 million, down $12-million from the second quarter of 2000 and down $4 million from the prior quarter.

The wealth management regular work force head count totalled 6,858 at quarter-end, down 137 from the prior quarter due to a realignment of staff to infrastructure groups.

The only real bright spots are that CIBC Wood Gundy is growing its fee-based asset management programs, particularly its investment advisory service, which increased assets $110 million year to date, up 79% from October 2000. To date, 96% of the company’s Imperial Service and private banking advisors have completed the Canadian Securities Course and 65% have also attained industry designation as professional financial planners.

On a conference call with analysts, the retail investment business hardly rated a mention, with most questions focusing on the loan portfolio, investment banking and merchant banking. However, CEO John Hunkin did indicate that by the fourth quarter the bank will be looking at either an IPO or private equity investments for its electronic banking division subsidiary, Amicus.