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Canadian Imperial (CM) Up 6.6% as Q1 Earnings & Revenues Rise
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Shares of Canadian Imperial Bank of Commerce (CM - Free Report) jumped 6.6% in response to impressive first-quarter fiscal 2022 (ended Jan 31) results. The company’s adjusted earnings per share came in at C$4.08, up 14% from the prior-year quarter.
Results benefited from a rise in revenues and lower provisions. A strong balance sheet position and rise in loan demand during the quarter supported the results. However, higher expenses posed a headwind.
After considering several non-recurring items, net income was C$1.87 billion ($1.48 billion), reflecting 15% year-over-year growth.
Revenues & Costs Rise
Adjusted total revenues rose 11% year over year to C$5.50 billion ($4.34 billion). The improvement was driven by higher net interest income and non-interest income.
Net interest income was C$3.13 billion ($2.47 billion), growing 10%. Non-interest income increased 11% to C$2.33 billion ($1.84 billion).
Adjusted non-interest expenses totaled C$2.99 billion ($2.36 billion), up 10%.
Adjusted efficiency ratio was 53.8% at the end of the reported quarter, falling marginally from 53.9% as of Jan 31, 2021. A decrease in the efficiency ratio indicates an improvement in profitability.
Provision for credit losses was C$75 million ($59.2 million), plunging 49% from the prior-year quarter.
Strong Balance Sheet & Capital Ratios
Total assets were C$861.7 billion ($676.9 billion) as of Jan 31, 2022, up 3% sequentially. Net loans and acceptances increased 4% to C$483.4 billion ($379.8 billion), while deposits climbed 5% to C$649.7 billion ($510.4 billion).
As of Jan 31, 2022, Common Equity Tier 1 ratio was 12.2% compared with 12.3% in the prior-year quarter. Tier 1 capital ratio was 13.8%, in line with the prior-year period level. Total capital ratio was 15.7% compared with 15.8%.
Adjusted return on common shareholders’ equity was 17.6% at the end of the fiscal first quarter, up from the prior year’s 14.7%.
Our Take
Given an improving economy and loan growth, Canadian Imperial is likely to witness steady improvement in revenues. However, relatively low-interest rates and a challenging operating backdrop are near-term concerns.
Canadian Imperial Bank of Commerce Price, Consensus and EPS Surprise
HSBC Holdings (HSBC - Free Report) reported fourth-quarter 2021 pre-tax profit of $2.7 billion, up 92.3% from $1.4 billion recorded in the prior-year quarter.
The reported quarter’s results benefited from a rise in adjusted revenues and lower expenses. A decline in the adjusted change in expected credit losses and other credit impairment charges was another positive for HSBC.
Barclays (BCS - Free Report) reported fourth-quarter 2021 net income attributable to ordinary equity holders of £1.12 billion ($1.51 billion), up significantly from the prior-year quarter.
Results were aided by a rise in revenues, partly offset by higher operating expenses. BCS recorded a credit impairment release during the quarter, which was another major positive.
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Canadian Imperial (CM) Up 6.6% as Q1 Earnings & Revenues Rise
Shares of Canadian Imperial Bank of Commerce (CM - Free Report) jumped 6.6% in response to impressive first-quarter fiscal 2022 (ended Jan 31) results. The company’s adjusted earnings per share came in at C$4.08, up 14% from the prior-year quarter.
Results benefited from a rise in revenues and lower provisions. A strong balance sheet position and rise in loan demand during the quarter supported the results. However, higher expenses posed a headwind.
After considering several non-recurring items, net income was C$1.87 billion ($1.48 billion), reflecting 15% year-over-year growth.
Revenues & Costs Rise
Adjusted total revenues rose 11% year over year to C$5.50 billion ($4.34 billion). The improvement was driven by higher net interest income and non-interest income.
Net interest income was C$3.13 billion ($2.47 billion), growing 10%. Non-interest income increased 11% to C$2.33 billion ($1.84 billion).
Adjusted non-interest expenses totaled C$2.99 billion ($2.36 billion), up 10%.
Adjusted efficiency ratio was 53.8% at the end of the reported quarter, falling marginally from 53.9% as of Jan 31, 2021. A decrease in the efficiency ratio indicates an improvement in profitability.
Provision for credit losses was C$75 million ($59.2 million), plunging 49% from the prior-year quarter.
Strong Balance Sheet & Capital Ratios
Total assets were C$861.7 billion ($676.9 billion) as of Jan 31, 2022, up 3% sequentially. Net loans and acceptances increased 4% to C$483.4 billion ($379.8 billion), while deposits climbed 5% to C$649.7 billion ($510.4 billion).
As of Jan 31, 2022, Common Equity Tier 1 ratio was 12.2% compared with 12.3% in the prior-year quarter. Tier 1 capital ratio was 13.8%, in line with the prior-year period level. Total capital ratio was 15.7% compared with 15.8%.
Adjusted return on common shareholders’ equity was 17.6% at the end of the fiscal first quarter, up from the prior year’s 14.7%.
Our Take
Given an improving economy and loan growth, Canadian Imperial is likely to witness steady improvement in revenues. However, relatively low-interest rates and a challenging operating backdrop are 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
CM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
HSBC Holdings (HSBC - Free Report) reported fourth-quarter 2021 pre-tax profit of $2.7 billion, up 92.3% from $1.4 billion recorded in the prior-year quarter.
The reported quarter’s results benefited from a rise in adjusted revenues and lower expenses. A decline in the adjusted change in expected credit losses and other credit impairment charges was another positive for HSBC.
Barclays (BCS - Free Report) reported fourth-quarter 2021 net income attributable to ordinary equity holders of £1.12 billion ($1.51 billion), up significantly from the prior-year quarter.
Results were aided by a rise in revenues, partly offset by higher operating expenses. BCS recorded a credit impairment release during the quarter, which was another major positive.