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) Up as Q1 Earnings & Revenues Rise
Read MoreHide Full Article
Shares of Canadian Imperial Bank of Commerce (CM - Free Report) rallied 1.1% on the NYSE in response to first-quarter fiscal 2020 (ended Jan 31) results. The bank’s adjusted earnings per share were C$3.24, up 7.6% from the year-ago reported figure.
In the first fiscal quarter, Canadian Imperial recorded a $339 million ($255 million) restructuring charge, primarily relating to employee severance as it undertook layoffs and shuffled top management ranks.
Results were driven by increase in non-interest income and net interest income along with lower provisions. Also, rise in loans and deposits acted as a tailwind. However, higher operating expenses posed an undermining factor.
After considering several non-recurring items, net income was C$1.21 billion ($1.05 billion), reflecting a rise of 2.5% year over year.
Revenues & Adjusted Expenses Rise
Total revenues for the quarter were up 6.3% year over year to C$4.86 billion ($3.59 billion).
Net interest income was C$2.76 billion ($2.03 billion), up 6.4% from the year-ago quarter. The increase reflected rise in interest income and lower interest expenses.
Non-interest income increased 6.3% year over year to C$2.09 billion ($1.54 billion). The rise was mainly driven by credit fees, investment management and custodial fees, and mutual fund fees.
Adjusted non-interest expenses totaled C$2.7 billion ($1.99 billion), increasing 7.9% from the year-ago quarter.
Adjusted efficiency ratio was 55% at the end of the reported quarter, up from 54.4% as of Jan 31, 2019. Rise in efficiency ratio indicates decline in profitability.
Total provision for credit losses was down 22.8% year over year to C$261 million ($219.1 million).
Strong Balance Sheet & Capital Ratios
Total assets were C$672.1 billion ($486.9 billion) as of Jan 31, 2020, up 3.1% from the prior quarter. Net loans and acceptances grew nearly 1% sequentially to C$402.5 billion ($299.6 billion) and deposits rose 2.5% to C$497.9 billion ($364.5 billion).
As of Jan 31, 2020, Common Equity Tier 1 ratio was 11.3%, up from 11.2% in the prior-year quarter. Furthermore, Tier 1 capital ratio was 12.5% compared with 12.7% as of Jan 31, 2019. Total capital ratio was 14.5%, down from 14.7%.
Adjusted return on common shareholders’ equity was 16.1% at the end of the reported quarter, up from 16% a year ago.
Dividend Hike
Concurrently, Canadian Imperial announced a quarterly dividend of C$1.46 per share, representing a hike of 1.4% from the prior payout.
Our Viewpoint
Given an improving economy and loan growth, Canadian Imperial is expected to witness steady improvement in revenues. However, elevated expenses and a challenging operating backdrop remain major concerns.
Canadian Imperial Bank of Commerce Price and EPS Surprise
HSBC Holdings (HSBC - Free Report) recorded a pre-tax loss of $3.9 billion in fourth-quarter 2019 against a pre-tax profit of $3.3 billion reported in the prior-year quarter. The pre-tax loss was primarily impacted by a goodwill impairment charge of $7.3 billion and a U.K. bank levy charge of $1 billion.
Barclays (BCS - Free Report) reported fourth-quarter 2019 net income attributable to ordinary equity holders of £681 million ($877.4 million). This reflects a marked improvement from net loss attributable to ordinary equity holders of £14 million ($18 million) in the year-ago quarter.
Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring earnings of R$7.3 billion ($1.77 billion) in fourth-quarter 2019, up 12.6% year over year. Including non-recurring items, net income came in at R$7.5 billion ($1.82 billion), up 20.6%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Canadian Imperial (CM) Up as Q1 Earnings & Revenues Rise
Shares of Canadian Imperial Bank of Commerce (CM - Free Report) rallied 1.1% on the NYSE in response to first-quarter fiscal 2020 (ended Jan 31) results. The bank’s adjusted earnings per share were C$3.24, up 7.6% from the year-ago reported figure.
In the first fiscal quarter, Canadian Imperial recorded a $339 million ($255 million) restructuring charge, primarily relating to employee severance as it undertook layoffs and shuffled top management ranks.
Results were driven by increase in non-interest income and net interest income along with lower provisions. Also, rise in loans and deposits acted as a tailwind. However, higher operating expenses posed an undermining factor.
After considering several non-recurring items, net income was C$1.21 billion ($1.05 billion), reflecting a rise of 2.5% year over year.
Revenues & Adjusted Expenses Rise
Total revenues for the quarter were up 6.3% year over year to C$4.86 billion ($3.59 billion).
Net interest income was C$2.76 billion ($2.03 billion), up 6.4% from the year-ago quarter. The increase reflected rise in interest income and lower interest expenses.
Non-interest income increased 6.3% year over year to C$2.09 billion ($1.54 billion). The rise was mainly driven by credit fees, investment management and custodial fees, and mutual fund fees.
Adjusted non-interest expenses totaled C$2.7 billion ($1.99 billion), increasing 7.9% from the year-ago quarter.
Adjusted efficiency ratio was 55% at the end of the reported quarter, up from 54.4% as of Jan 31, 2019. Rise in efficiency ratio indicates decline in profitability.
Total provision for credit losses was down 22.8% year over year to C$261 million ($219.1 million).
Strong Balance Sheet & Capital Ratios
Total assets were C$672.1 billion ($486.9 billion) as of Jan 31, 2020, up 3.1% from the prior quarter. Net loans and acceptances grew nearly 1% sequentially to C$402.5 billion ($299.6 billion) and deposits rose 2.5% to C$497.9 billion ($364.5 billion).
As of Jan 31, 2020, Common Equity Tier 1 ratio was 11.3%, up from 11.2% in the prior-year quarter. Furthermore, Tier 1 capital ratio was 12.5% compared with 12.7% as of Jan 31, 2019. Total capital ratio was 14.5%, down from 14.7%.
Adjusted return on common shareholders’ equity was 16.1% at the end of the reported quarter, up from 16% a year ago.
Dividend Hike
Concurrently, Canadian Imperial announced a quarterly dividend of C$1.46 per share, representing a hike of 1.4% from the prior payout.
Our Viewpoint
Given an improving economy and loan growth, Canadian Imperial is expected to witness steady improvement in revenues. However, elevated expenses and a challenging operating backdrop remain major concerns.
Canadian Imperial Bank of Commerce Price and EPS Surprise
Canadian Imperial Bank of Commerce price-eps-surprise | Canadian Imperial Bank of Commerce Quote
Canadian Imperial 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) recorded a pre-tax loss of $3.9 billion in fourth-quarter 2019 against a pre-tax profit of $3.3 billion reported in the prior-year quarter. The pre-tax loss was primarily impacted by a goodwill impairment charge of $7.3 billion and a U.K. bank levy charge of $1 billion.
Barclays (BCS - Free Report) reported fourth-quarter 2019 net income attributable to ordinary equity holders of £681 million ($877.4 million). This reflects a marked improvement from net loss attributable to ordinary equity holders of £14 million ($18 million) in the year-ago quarter.
Itau Unibanco Holding S.A. (ITUB - Free Report) posted recurring earnings of R$7.3 billion ($1.77 billion) in fourth-quarter 2019, up 12.6% year over year. Including non-recurring items, net income came in at R$7.5 billion ($1.82 billion), up 20.6%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>