Canadian Imperial Profit Slips After Caribbean and Card ChargesDoug Alexander
Canadian Imperial Bank of Commerce, the country’s fifth-biggest lender, said quarterly profit slipped 1.9 percent on costs to reorganize its Caribbean banking business and introduce a new credit card.
Net income in the fourth quarter ended Oct. 31 fell to C$836 million ($783 million), or C$2.05 a share, from C$852 million, or C$2.02, a year earlier, the Toronto-based bank said today in a statement. Adjusted earnings, which exclude some items, were C$2.22 a share, beating the C$2.15 average estimate of 14 analysts surveyed by Bloomberg News.
The bank incurred a C$39 million restructuring cost tied to its FirstCaribbean International Bank unit, and a C$35 million impairment tied to a U.S. leveraged-finance portfolio that it’s exiting. CIBC also had C$24 million in costs tied to marketing a new credit card and its Aeroplan-branded card sale to Toronto-Dominion Bank.
Canadian Imperial announced a new travel-reward credit card in October after losing its 22-year exclusive relationship to issue cards linked to Aimia Inc.’s Aeroplan rewards program earlier this year. The bank planned to spend C$50 million to develop the new card, with C$30 million spent this fiscal year and the rest in 2014.
Toronto-Dominion, which becomes Aimia’s primary card issuer next month, agreed in September to buy half of Canadian Imperial’s Aerogold Visa card portfolio.
Royal Bank of Canada, Canada’s largest lender, and Toronto-Dominion Bank, the second largest, also report today.
(CIBC will hold a conference call to discuss results at +1-416-340-2217 or +1-866-696-5910 passcode 3201624# at 7:30 a.m. or at www.cibc.com)