CIBC Q1 2020 beats analyst forecasts with a 3% rise in net income to C$1.21bn.
However, the earnings release is overshadowed by CIBC’s plans to reduce its headcount by 5%.
That equates to a loss of around 2,250 jobs as a cost-cutting exercise.
CIBC’s Personal and Small Business Banking unit reports net income of C$617m, up 34% year-over-year. Meantime, the bank’s Canadian Commercial Banking and Wealth Management division reports net income of C$336m up 7% y-o-y.
This is driven by higher assets under management and commission revenue in wealth management. Volume growth and higher fees in commercial banking are partially offset by narrower margins.
Notably, the bank’s Capital Markets unit reports net income of C$335m, up 63% y-o-y. This is primarily due to higher revenue and a lower provision for credit losses.
CIBC Q1 2020 highlights
The bank’s Personal and Small Business banking unit reports higher net interest income driven by growth in deposit volumes. Specifically, deposit balances rise by 6% y-o-y.
At the same time, margin expansion is highlighted by a 9 bps rise in the net interest margin to 2.51%.
Canadian Commercial and Wealth posts Commercial loan balances up 9% y-o-y. Furthermore, Commercial deposit balances are up 14% y-o-y.
Moreover, the bank reports that total provisions for credit losses are down quarter-over-quarter and year-over-year.
CIBC Q1 2020 digital metrics
The bank reports a further rise in its digital adoption rate to 69.9% from 67.1% a year ago.
CIBC ends the first quarter with 2.9 active mobile users, up from 2.7 million a year ago.
Total branch numbers are down by a net 23 outlets in the past year to 1,022 branches.
Less positive metrics include a dip in market share for domestic mortgages.
“We delivered a strong first quarter as we executed on our client-focused strategy and continued to diversify our earnings growth. We are transforming our bank by leveraging our client-focused culture, optimising our cost base, and strategically reinvesting our capital to deliver value to our shareholders, clients, employees and communities,” says Victor Dodig, CIBC President and CEO.