Canadian Imperial's Q2 Earnings Rise on Higher Revenues, Provisions Up

Canadian Imperial Bank of Commerce CM announced second-quarter fiscal 2025 (ended April 30) results last week. Adjusted earnings per share of C$2.05 increased 17% from the prior-year quarter.

Results benefited from growth in revenues and a rise in loans and deposit balances. However, higher expenses and a jump in provisions were the undermining factors.

After considering non-recurring items, net income was C$2 billion ($1.41 billion), reflecting a 15% year-over-year growth.

CM’s Revenues Rise, Costs Up

Total revenues were C$7.02 billion ($4.94 billion), up 14% year over year. The rise was driven by higher net interest income and non-interest income.

Net interest income (NII) came in at C$3.79 billion ($2.67 billion), up 15%. Non-interest income increased 12% to C$3.23 billion ($2.27 billion).

Non-interest expenses totaled C$3.82 billion ($2.69 billion), rising 9% year over year.

The adjusted efficiency ratio was 54.2% at the end of the reported quarter, down from 56.4% in the prior-year quarter. A decline in the efficiency ratio indicates an improvement in profitability.

Provision for credit losses was C$605 million ($425.7 million), up 18% from the prior-year quarter.

As of April 30, 2025, total assets were C$1.09 trillion ($774.2 billion), up almost 1% from the prior quarter. Net loans and acceptances increased marginally to C$571.6 billion ($413.6 billion), while deposits increased slightly to C$784.6 billion ($567.7 billion).

CM’s Capital & Profitability Ratios Improve

As of April 30, 2025, the Common Equity Tier 1 ratio was 13.4% compared with 13.1% in the prior-year quarter. The Tier 1 capital ratio was 15.2% compared with 14.7% in the prior-year period. The total capital ratio was 17.8%, up from 17%.

Adjusted return on common shareholders’ equity was 13.9% at the end of the fiscal second quarter, up from the prior year’s 13.4%.

Our Take on Canadian Imperial

Given high interest rates and decent loan demand, Canadian Imperial is likely to witness an improvement in revenues. However, a challenging operating backdrop and steadily increasing expenses remain near-term concerns.
 

Canadian Imperial Bank of Commerce Price, Consensus and EPS Surprise

Canadian Imperial Bank of Commerce price-consensus-eps-surprise-chart | Canadian Imperial Bank of Commerce Quote

Currently, CM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Foreign Banks

Toronto-Dominion Bank’s TD second-quarter fiscal 2025 (ended April 30) adjusted net income of C$3.6 billion ($2.63 billion) fell 4.3% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Higher provisions for credit losses and expenses acted as undermining factors. Also, lower loan balances were another negative. Nonetheless, growth in NII and non-interest income was positive for TD. 

Deutsche Bank DB reported first-quarter 2025 earnings attributable to its shareholders of €1.78 billion ($2.01 billion), up 39.2% year over year.

DB’s results were aided by a rise in revenues and lower expenses. However, higher provision for credit losses was a spoilsport.

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This article originally published on Zacks Investment Research (zacks.com).

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