BUSINESS

CIBC Profit Shrinks Amid Weakness In Retail, Business Banking

02/26/2015 06:34 EST | Updated 04/28/2015 05:59 EDT
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TORONTO - CIBC is reporting a 21.6 per cent decline in first quarter net income compared with a year ago, when the bank had a onetime gain from selling part of its Aeroplan credit card business.

Net income for the three months ended Jan. 31 was $923 million, down from $1.177 billion in the first quarter of 2014.

CIBC's retail and business banking segment accounted for $650 million of the net income, down 13 per cent from the first quarter of 2014, which included a one-time $123-million gain from the sale of half its Aeroplan credit card portfolio.

Excluding the Aeroplan transaction as well as charges related to an internal reorganization and other items, CIBC's overall adjusted net income was $956 million, up from $951 million.

Adjusted net icome at CIBC's retail and business banking dropped four per cent or $25 million to $618 million.

CIBC's profit equalled $2.28 per share of net income and $2.36 per share of adjusted earnings — above analyst estimates of $2.27 per share.

CIBC also announced its quarterly dividend will go up by three cents per common share to $1.06 with its April 28 payment.

"In the quarter, CIBC's core businesses delivered solid results despite a challenging macroeconomic environment," CIBC president and chief executive Victor Dodig said in a statement, without naming specific challenges.

The company says its net income included a $62-million charge (after tax) related to "ongoing efforts to align resources to better serve our clients."

The Wall Street Journal reported previously that CIBC cut 500 jobs in January. The bank didn't confirm the figure at the time but did say it was realigning its resources.

The quarter also included a a $34-million after-tax gain related to adjustmens on credit card balance sheets, a $13 million after-tax gain from the sale of an investment and other items.

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