CIBC (CM) Notches A Ninth Straight Quarter Of Double-Digit Growth

CIBC reported nine consecutive quarters of double-digit earnings per share growth as of August 27. Adjusted EPS reached $2.73, up 26% year-over-year, while adjusted net income climbed to $2.648 billion on $8.368 billion in revenue, a 15% increase. Return on equity hit 16.8%, up 260 basis points from the same period last year. Capital Markets net income grew 34% year-over-year to $722 million, and Canadian Personal and Business Banking net income rose 17% to $948 million.

Net interest margin improved to 304 basis points, up 3 basis points sequentially. US net income grew 23% to $320 million, despite slightly lower net interest margins. Efficiency ratio tightened by 200 basis points, indicating revenue outpacing costs. Wealth Management saw strong asset growth and rising credit fees. Investor's Edge experienced 34% growth in new account openings.

However, CIBC's Common Equity Tier 1 ratio dipped 19 basis points to 13.4%, due to share buybacks and a $269 million charge related to the planned sale of its Caribbean banking unit. Total deposits fell 1%, and GIC balances decreased 10%. Management cautioned about rising trade tensions and a cooling housing market affecting household budgets.

Hedge fund ownership declined slightly, but the stock's valuation remains modest compared to its earnings growth. The bank plans to present its growth strategy at an Investor Day on December 9.