Big Banks Adjust to Strained Consumers as Divide Grows
Canadian Imperial Bank of Commerce reported its third-quarter profit rose compared with a year ago as it set aside less money for bad loans, bucking a trend seen this quarter among other banks.
CIBC said Thursday its net income totalled $1.80 billion or $1.82 per diluted share in for the quarter ended July 31, up from $1.43 billion or $1.47 per diluted share in the same quarter last year.
Revenue totalled $6.60 billion, up from $5.85 billion.
CIBC’s provision for credit losses for the quarter amounted to $483 million, down from $736 million a year earlier.
“While tighter monetary policy has slowed demand for loans in the industry on both sides of the border this year, we’re expecting business activity to pick up through 2025 amid further interest rate relief and stronger economic growth,” said CIBC chief executive Victor Dodig on the bank’s call with analysts.
Dodig said while commercial clients are “feeling more buoyant” after the Bank of Canada slashed its key interest rate in both June and July, consumers are still “more tentative when it comes to borrowing.”
“But with two or three rate cuts and five-year fixed mortgages getting to a better rate, a price point maybe slightly below four percent, I think you’ll see that sentiment become more solidified, and we would see that as encouraging for the business going forward,” he said.
CIBC chief risk officer Frank Guse added the bank continues to have a “prudent outlook on credit performance overall,” with unemployment remaining a headwind.
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