CIBC hikes dividend, plans buyback despite Q4 profit miss
BNN Bloomberg
Canadian Imperial Bank of Commerce joined its peers on Thursday in rewarding shareholders for their patience.
Canadian Imperial Bank of Commerce joined its peers on Thursday in rewarding its shareholders for their patience.
The bank said its board authorized a dividend hike that will lift the quarterly payout to $1.61 per share from $1.48, effective with the Jan. 28 distribution. It also announced plans to repurchase up to 10 million of its common shares.
Like the other lenders that have made similar moves this week, CIBC was able to share its wealth after the Office of the Superintendent of Financial Institutions recently lifted its pandemic-era ban on dividend hikes and share buybacks.
CIBC also said on Thursday its full-year profit climbed to $6.4 billion from $3.8 billion in 2020. For the fiscal fourth quarter, which ended Oct. 31, earnings surged 42 per cent year-over-year to $1.44 billion. However, on an adjusted basis the bank fell short of expectations at $3.37 per share; the average analyst estimate was for $3.54.
Unlike other banks this week whose profits got a boost from improved credit quality, CIBC set aside $78 million for loans that could go bad during the fourth quarter. In the prior quarter, the bank had benefitted from the release of $99 million that was previously set aside as provisions for its loan books.
CIBC's core Canadian personal and banking division saw profit stagnate in the final quarter of its fiscal year. Net income was $597 million, compared to $590 million a year earlier and $642 million in the prior quarter. The division's provisions for credit losses jumped to $164 million from $67 million in the fiscal third quarter. In a release, CIBC attributed the provisioning in part due to what it calls "model parameter updates."
