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The Canadian Imperial Bank of Commerce reported a 25% jump in net income to $1.16 billion in its latest quarter on strong domestic earnings and better-than-expected performance in the U.S. after acquiring a Chicago-based bank.

CIBC (TSX:CM) said Thursday its net income for the three months ended Oct. 31 amounted to $2.59 per diluted share, compared with $2.32 per share during the same period in 2016.

On an adjusted basis, CIBC’s profit amounted to $2.81 per share in the fourth quarter, up 8% from $2.60 per share in the fourth quarter of 2016.

That beat the $2.59 in adjusted earnings per share expected by analysts surveyed by Thomson Reuters.

For its full financial year, the Canadian lender’s net income attributable to equity shareholders was $4.7 billion, compared with $4.28 billion for its 2016 financial year.

Read: Scotiabank’s Q4 profit up 3%

Read: Royal Bank reports 12% rise in Q4 net income

Read: TD’s retail net income up 11% in Q4

“In 2017, CIBC delivered record net income driven by strong performance across all of our strategic business units, as well as our acquisition of The PrivateBank,” says Victor Dodig, CIBC’s president and chief executive in a statement.

Revenue for the quarter totalled $4.27 billion, up 16% from $3.68 billion in the same period a year ago, while revenue for the full year was $16.28 billion, up from $15.04 billion.

CIBC said its Canadian personal and small business banking division saw net income of $551 million, down $8 million or 1.4% from the fourth quarter of 2016. On an adjusted basis, the bank’s net income was $623 million, up $63 million or 11.3% from the same quarter a year earlier.

Wealth management makes gains

Its Canadian commercial banking and wealth management division reported net income of $287 million for the quarter, up 13% from $254 million at the same time last year.

The division’s revenue of $922 million was up $76 million from the fourth quarter of 2016, driven by “strong deposit and lending growth in our commercial banking business,” says the bank in a release. In addition, “wealth management revenue benefited from growth in AUA and AUM, driven by market appreciation and strong net sales of long-term mutual funds.”

The bank’s U.S. commercial banking and wealth management unit saw a major bump in profit, with net income for the quarter of $107 million—more than four times the $23 million it saw during the same quarter a year earlier.

That reflected a full quarter of “strong performance” from The PrivateBank, which CIBC purchased for roughly US$5 billion in June and rebranded in September as CIBC Bank USA.

“CIBC came in well ahead of expectations on the back of exceptionally strong domestic retail and a better than forecast contribution from its new U.S. platform, including PrivateBank,” Barclays analyst John Aiken wrote in a note to clients.

CIBC’s capital markets division, however, saw a drop in net income to $222 million from $255 million during the fiscal fourth quarter in 2016.

The bank’s common equity tier 1 ratio, a key measure of the bank’s financial health, was 10.6% in the fourth quarter, up from 10.4% in the third quarter, but down from 11.3% one year ago.

Provisions for credit losses, or money set aside for bad loans, was $229 million, up from $229 million in the fourth quarter of 2016.

Originally published on Advisor.ca
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