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CIBC reports record Q3 earnings of $890M; easily beast analyst estimates


TORONTO - Canadian Imperial Bank of Commerce (TSX:CM) has delivered third-quarter profits that are the strongest in its history, helped by growth in several of its key divisions.

The bank reported net earnings rose to $890 million or $2.16 per diluted share in the period. That's an increase from $841 million or $2 a diluted share in the same period last year.

On an adjusted basis, earnings were equal to $2.29 per share, which came in 14 cents higher than analysts had predicted on average, according to a survey by Thomson Reuters.

Revenue rose to $3.26 billion from $3.15 billion.

While the bank left its quarterly dividend unchanged at 96 cents per share, it also announced a share buyback plan that would see it purchase up to eight million shares, or about two per cent of its shares outstanding.

In its consumer and business banking operations, net income grew to $638 million from $594 million a year ago, mainly from less money set aside for bad loans.

Wealth management profits grew 34 per cent to $102 million on stronger revenue.

Wholesale banking results also picked up, with net income rising to $217 million from $156 million on high revenue.

In its outlook, CIBC said it expects domestic consumer and business banking operations will face "slightly slower growth" in mortgage demand, alongside slow consumer credit growth.

The Canadian banks could face challenges in the coming quarters as higher interest rates pressure the country's housing market and keep more consumers cautious about borrowing.

Meanwhile, the bank said it expects businesses to continue to borrow at a "healthy growth rate."

CIBC is still in negotiations with rewards points operator Aimia Inc. (TSX:AIM) over whether it will maintain a partnership with its Aeroplan rewards program, which is part of its existing CIBC Aeroplan credit card portfolio.

"CIBC will exercise its legal options under the provisions of the existing Aimia contract" if the talks don't work out, president and CEO Gerald McCaughey said in a conference call with analysts.

He declined to offer much in further detail.

An longtime agreement between CIBC and Aimia gave the bank rights for an Aeroplan-branded credit card. The two companies have been partners for more than 20 years, but their 10-year term agreement expires this year.

The bank declined to match an offer from TD Bank (TSX:TD), but has proposed it keep half of current Aerogold customers who have other products with CIBC that earn Aeroplan miles, such as chequing accounts and mortgages.

CIBC shares closed up $2.22, or 2.8 per cent, to $82.66 on the Toronto Stock Exchange Thursday.