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CIBC sees Q1 trading revenue jump while earnings hit by lawsuit settlement

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Market volatility helped lead to a surge in trading activity for CIBC that boosted first quarter revenue, while a lawsuit settlement pushed earnings down. The bank, the first among the Big Six to report first-quarter results this year, said Friday that its non-trading margins on earnings income also rose in the quarter thanks to rising central bank interest rates, while the same trend is leading to a slowing of loan growth.

Market volatility helped lead to a surge in trading activity for CIBC that boosted first quarter revenue, while a lawsuit settlement pushed earnings down.

He said that overall the bank expects the trend to mean increased pressure on the economy, though he stopped short of predicting an outright recession. "Real estate is quiet. That will subdue growth a bit," said Jon Hountalas, recently-appointed group head of Canadian banking, noting that the bank will be more conservative in how it gives loans to new clients.The comments come as CIBC reported a net income of $432 million or 39 cents per diluted share for the quarter ended Jan. 31 compared with $1.87 billion or $2.01 per diluted share a year earlier.Adjusted earnings, which excluded the $1.

"However, we anticipate that the market is likely to temper its enthusiasm to a certain degree as the better-than-expected results were led by exceptionally strong trading revenues and lower-than-forecast provisions," he said.

 

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