CIBC Q4 Profit Rises 42%, Dividend Raised

Shares of Canadian Imperial Bank of Commerce (CM) fell 3% in early trading Thursday after Canada’s fifth-largest bank posted strong profits in the fourth quarter, but missed estimates.

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The bank raised its quarterly dividend by 10%. (See Analysts’ Top Stocks on TipRanks)

Revenue & Earnings

Total revenue was C$5.06 billion in Q4 2021, slightly higher than in Q4 2020, but missed estimates of C$5.07 billion. Profit came in at C$1.44 billion (C$3.07 per diluted share) in the fourth quarter of 2021, up 42% from C$1.02 billion (C$2.20 per diluted share), in the same quarter a year ago.

CIBC earned C$3.37 per diluted share on an adjusted basis, an increase of 21% from the prior-year quarter, but it missed the consensus estimate of C$3.53 per share.

The results announced were impacted in particular by a charge of C$109 million related to the consolidation of the real estate loan portfolio.

Profits at CIBC’s Canadian Personal and Business Banking unit came in at C$597 million, up 1.2% from a year earlier.

For the Canadian Commercial Banking and Wealth Management unit, profit increased 30% year-on-year to C$442 million. Profits from U.S. Commercial Banking and Wealth Management rose 89.6% to C$256 million.

Capital Markets profit climbed to C$378 million, an increase of 21.9% from the prior-year quarter.

The bank’s Common Equity Tier 1 ratio stood at 12.4% in the quarter, compared to 12.1% a year ago.

CEO Commentary

CIBC President and CEO Victor Dodig said, “We delivered strong financial performance in 2021 with growth across all of our strategic business units as our entire team focused on helping our clients achieve their ambitions.

“Against the backdrop of the ongoing global pandemic, our bank continued to invest for the future, including expanding our platform and capabilities in the U.S., accelerating the growth of our Canadian consumer franchise, and making foundational investments in cloud technology and other capabilities that will enable us to do more for clients in 2022 and beyond.”

Dividend Hike

CIBC announced an increase in its quarterly dividend on common shares from C$1.46 per share to C$1.61 per share for the quarter ending January 31, 2022.

Wall Street’s Take

Following the results, Canaccord Genuity analyst Scott Chan maintained a Buy rating on CM with a C$163 price target. This implies 17.5% upside potential.

The rest of the Street is bullish on CM with a Strong Buy consensus rating based on three Buys and one Hold. The average Canadian Imperial Bank of Commerce price target of C$163.51 implies 17.9% upside potential to current levels.