CIBC Q2 2019 net income inches up by 2% year-on-year to C$1.35bn just missing analyst forecasts.
But the bank’s Canadian Personal and Small Business Banking unit reports net income of C$570m, down 2% y-o-y.
On the other hand, the Canadian Commercial Banking and Wealth Management unit reports net income of C$328m up 6% year-on-year.
Higher group revenue was more than offset by higher expenses and provision for credit losses. The increase in revenue was due to wider spreads and volume growth, partially offset by lower fee income.
Provision for credit losses of C$255m is up by 20% from the second quarter a year ago. This is primarily due to higher provisions on impaired loans in Canadian Commercial Banking and Wealth Management.
Group highlights include CIBC’s capital markets business, including investment banking unit. The division reports income up 12%, boosted by higher underwriting and advisory fees.
CIBC Q2 2019 retail banking highlights
Revenue at CIBC’s bank’s Canadian Personal and Small Business Banking unit is up by 1.8% y-o-y. Revenue growth is driven primarily by a 9 basis points rise in the net interest margin y-o-y to 247bps. Meantime, volume growth is highlighted by a 7% y-o-y rise in deposits to C$178bn.
“We delivered solid earnings this quarter. This reflects the strength of our increasingly diversified business,” says Victor G Dodig, CIBC President and CEO.
“We continue to invest across our bank for the future, while gaining efficiencies through our ongoing transformation.”
CIBC Q2 2019: digital banking hits
The bank’s digital adoption rate, calculated using 90-day active users, is up to 67.7% from 63% two years ago.
Active Canadian mobile banking users are up by 12.5% from a year ago to 2.7 million.
Self-serve transactions now account for 88.8% of transactions, up from 87.1% a year ago.
The bank ends the second quarter with 1,042 branches in Canada, down by a net 25 units from a year ago.
CIBC Q2 2019: market shares
CIBC ranks fourth by market share for retail banking deposits and small business deposits with 16.8% and 13.7% respectively.
But for Canadian retail mutual funds, CIBC’s 13.3% share ranks fifth by market share.
CICB also ranks fifth by market share for small business lending with a 10.1% share of the market.
For retail mortgages, CIBC ranks fourth with a market share of 18%. The bank also ranks fourth with a 12.5% market share for retail lending including cards.