We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Canadian Imperial (CM) Q1 Earnings Improve, Stock Down 2.3%
Read MoreHide Full Article
Canadian Imperial Bank of Commerce (CM - Free Report) reported first-quarter fiscal 2021 (ended Jan 31) results wherein adjusted earnings per share came in at C$3.58, up 10% from the prior-year quarter.
Results benefited from rise in revenues and lower provisions. Further, strong balance sheet position during the quarter supported the results. However, a slight rise in costs was the headwind. This was perhaps the reason that led the shares of Canadian Imperial 2.3% to fall on the NYSE following the release late last week.
After considering several non-recurring items, net income was C$1.63 billion ($1.27 billion), reflecting growth of 34% year over year.
Revenues & Costs Rise
Adjusted total revenues rose 2% year over year to C$5 billion ($3.88 billion). The improvement was driven by higher non-interest and net interest income.
Net interest income was C$2.84 billion ($2.21 billion), increasing 3% from the year-ago quarter. Non-interest income rose 1% to C$2.12 billion ($1.65 billion).
Adjusted non-interest expenses totaled C$2.73 billion ($2.12 billion), up slightly.
Adjusted efficiency ratio was 53.9% at the end of the reported quarter, down from 55% as of Jan 31, 2020. A fall in the efficiency ratio indicates an improvement in profitability.
Total provision for credit losses declined 43.7% year over year to C$147 million ($114.2 million).
Strong Balance Sheet & Capital Ratios
Total assets were C$782.9 billion ($612.6 billion) as of Jan 31, 2021, up 2% from the prior-quarter level. Net loans and acceptances increased 1% to C$421 billion ($329.4 billion), while deposits climbed slightly to C$573.9 billion ($449.1 billion), on a sequential basis.
As of Jan 31, 2021, Common Equity Tier 1 ratio was 12.3%, up from 11.3% in the prior-year quarter. Further, Tier 1 capital ratio was 13.8% compared with 12.5% as of Jan 31, 2020. Total capital ratio was 15.8%, up from 14.5%.
Adjusted return on common shareholders’ equity was 17.2% at the end of the fiscal first quarter, up from the prior year’s 16.1%.
Our Take
Given anticipations of an improving economy and loan growth, Canadian Imperial is likely to witness steady improvement in revenues. However, low interest rates and a challenging operating backdrop are major near-term concerns.
Canadian Imperial Bank of Commerce Price, Consensus and EPS Surprise
The Bank of Nova Scotia (BNS - Free Report) reported first-quarter fiscal 2021 (ended Jan 31) adjusted net income of C$2.4 billion ($1.9 billion), up 3.2% year over year. Decline in provisions and expenses were positives. However, decline in revenues was discouraging.
Bank of Montreal’s (BMO - Free Report) first-quarter fiscal 2021 (ended Jan 31) adjusted net income came in at C$2.04 billion ($1.58 billion), up 26% year over year. The company recorded improvement in revenues, lower provisions and a decline in expenses, which supported results.
Toronto-Dominion Bank’s (TD - Free Report) adjusted net income in the first quarter fiscal 2021 (ended Jan 31) climbed 10% from the prior-year quarter to C$3.38 billion ($2.63 billion). Results were supported by higher non-interest income and decline in provisions. However, fall in loan balance and lower net interest income were headwinds.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
Canadian Imperial (CM) Q1 Earnings Improve, Stock Down 2.3%
Canadian Imperial Bank of Commerce (CM - Free Report) reported first-quarter fiscal 2021 (ended Jan 31) results wherein adjusted earnings per share came in at C$3.58, up 10% from the prior-year quarter.
Results benefited from rise in revenues and lower provisions. Further, strong balance sheet position during the quarter supported the results. However, a slight rise in costs was the headwind. This was perhaps the reason that led the shares of Canadian Imperial 2.3% to fall on the NYSE following the release late last week.
After considering several non-recurring items, net income was C$1.63 billion ($1.27 billion), reflecting growth of 34% year over year.
Revenues & Costs Rise
Adjusted total revenues rose 2% year over year to C$5 billion ($3.88 billion). The improvement was driven by higher non-interest and net interest income.
Net interest income was C$2.84 billion ($2.21 billion), increasing 3% from the year-ago quarter. Non-interest income rose 1% to C$2.12 billion ($1.65 billion).
Adjusted non-interest expenses totaled C$2.73 billion ($2.12 billion), up slightly.
Adjusted efficiency ratio was 53.9% at the end of the reported quarter, down from 55% as of Jan 31, 2020. A fall in the efficiency ratio indicates an improvement in profitability.
Total provision for credit losses declined 43.7% year over year to C$147 million ($114.2 million).
Strong Balance Sheet & Capital Ratios
Total assets were C$782.9 billion ($612.6 billion) as of Jan 31, 2021, up 2% from the prior-quarter level. Net loans and acceptances increased 1% to C$421 billion ($329.4 billion), while deposits climbed slightly to C$573.9 billion ($449.1 billion), on a sequential basis.
As of Jan 31, 2021, Common Equity Tier 1 ratio was 12.3%, up from 11.3% in the prior-year quarter. Further, Tier 1 capital ratio was 13.8% compared with 12.5% as of Jan 31, 2020. Total capital ratio was 15.8%, up from 14.5%.
Adjusted return on common shareholders’ equity was 17.2% at the end of the fiscal first quarter, up from the prior year’s 16.1%.
Our Take
Given anticipations of an improving economy and loan growth, Canadian Imperial is likely to witness steady improvement in revenues. However, low interest rates and a challenging operating backdrop are major near-term concerns.
Canadian Imperial Bank of Commerce Price, Consensus and EPS Surprise
Canadian Imperial Bank of Commerce price-consensus-eps-surprise-chart | Canadian Imperial Bank of Commerce Quote
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Canadian Banks
The Bank of Nova Scotia (BNS - Free Report) reported first-quarter fiscal 2021 (ended Jan 31) adjusted net income of C$2.4 billion ($1.9 billion), up 3.2% year over year. Decline in provisions and expenses were positives. However, decline in revenues was discouraging.
Bank of Montreal’s (BMO - Free Report) first-quarter fiscal 2021 (ended Jan 31) adjusted net income came in at C$2.04 billion ($1.58 billion), up 26% year over year. The company recorded improvement in revenues, lower provisions and a decline in expenses, which supported results.
Toronto-Dominion Bank’s (TD - Free Report) adjusted net income in the first quarter fiscal 2021 (ended Jan 31) climbed 10% from the prior-year quarter to C$3.38 billion ($2.63 billion). Results were supported by higher non-interest income and decline in provisions. However, fall in loan balance and lower net interest income were headwinds.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>