CIBC Divests Caribbean Subsidiary for US$1.6 Billion While Posting Higher Q2 Earnings
CIBC announced a deal to sell its 91.67 per cent interest in CIBC Caribbean to the Bank of N.T. Butterfield & Son for a total of US$1.6 billion in cash and stock as it reported its second-quarter profit rose compared with a year ago.
Under the CIBC Caribbean agreement, the bank said Thursday it will receive US$1 billion in cash and 52.1 million Butterfield common shares, which will represent about a 22 per cent stake in the company.
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The sale came as CIBC says it earned C$2.47 billion or C$2.53 per diluted share for the quarter ended April 30, up from C$2.01 billion or C$2.04 per diluted share a year earlier.
Revenue for the quarter totalled C$8.01 billion, up from C$7.02 billion in the same quarter last year, while its provision for credit losses amounted to C$605 million, the same as a year earlier.
On an adjusted basis, CIBC says it earned C$2.54 per diluted share in its latest quarter, up from an adjusted profit of C$2.05 per diluted share in the same quarter last year.
Analysts on average had expected an adjusted profit of C$2.44 per share, according to LSEG Data & Analytics.
“We delivered strong financial results through the disciplined execution of our client-focused strategy, including double-digit growth in net income and a higher return on equity compared to a year ago, driven by robust results across all of our business units,” CIBC chief executive Harry Culham said in a statement.
CIBC said its Canadian personal and business banking group earned $846 million for the quarter, up from $734 million a year ago
The bank’s Canadian commercial banking and wealth management business earned $614 million, up from $549 million in the same quarter last year.
CIBC’s U.S. commerical banking and wealth management group earned $260 million, up from $173 million a year ago
The bank’s capital markets arm earned $792 million, up from $566 million in its second quarter last year.
CBIC also announced several executive changes includes the appointment of Susan Rimmer as senior executive vice-president and group head, commercial banking. Rimmer, who already leads commercial banking in Canada, will also assume accountability for commercial banking in the U.S., as well as the office of the CEO.
The bank also said Eric Belanger has been appointed senior executive vice-president and group head, wealth management.
This article was first reported by The Canadian Press
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The Canadian Press
