(March 1 – 11:20 ET) – CIBC’s wealth management division stumbled in the first quarter, feeling the effect of tougher markets.

The retail investment group managed to meet just one of its four objectives — it blew away its return on equity goal of 50% with an ROE of 100.7%. The group missed targets set for GIC market share, index fund assets and assets under administration.

GIC market share by declined by 11 basis points, while Index fund assets remain flat. As well the group’s target to increase assets under administration by 6% for the year is behind schedule.

The group’s net income was $110 million, down $25 million from the first quarter of 2000, but up $24 million from the fourth quarter of 2000. Quarter over quarter gains came as a result of the continued focus on expense management, while sustaining revenue during a period of weaker market conditions. Revenue was $613 million, down $144 million from the first quarter of 2000, and down $7 million from the fourth quarter of 2000.

The bank’s Imperial Service, its in-branch team for high net worth clients, reported revenue of $143 million in the quarter. That’s an increase of $9 million from the first quarter of 2000 due to increased volumes and higher interest margins earned on deposits. Revenue was down $2 million from the prior quarter.

Full-service brokerage revenue was $294 million in the quarter, down $140 million from the first quarter of 2000. The drop is due to higher than normal annual incentive fees in the first quarter of last year and lower volumes as a result of less robust market activity in 2001. Revenue was down $14 million from the prior quarter due to reduced retail trading activity.

Global private banking revenue was $34 million in the quarter, down $5 million from the first quarter of 2000, and in line with fourth quarter of 2000. Wealth product revenue, including mutual funds, investment management services, online and discount brokerage services and GICs was $125 million in the quarter, down $4 million from the first quarter of 2000 and up $8 million from the prior quarter.

With revenue down everywhere but in Imperial Service, non-interest expenses also declined to $460 million, down $86 million from the first quarter of 2000 and down $39 million from the prior quarter. The decrease was primarily due to revenue-related variable expenses and overall lower operating expenses.
-IE Staff