Thursday, 29 May 2014

CIBC profit falls; bank hikes dividend


CIBC

Trouble in CIBC's Caribbean banking subsidiary left a mark on the bank's second-quarter results, but executives say despite the challenges they're not planning to exit the region.

"The business has historically been a good investment for us," chief operating officer Richard Nesbitt told analysts during a conference call, adding that he believes the division can return to its past profitability levels.
"What you're seeing here is we continue to believe we can get there. Unfortunately, it's going to take us longer because the economic environment has not started to improve like we felt it would."
CIBC isn't the only Canadian bank to have suffered the effects of the weak Caribbean economy, but it has been hit the hardest in the quarter.

On Thursday, CIBC reported that its second-quarter profit dropped to $306 million, or 73 cents per share, due to losses from its CIBC First Caribbean subsidiary. That compared a profit of $862 million or $2.09 per share in the same quarter last year.

The bank also boosted its quarterly dividend by two cents to $1 per common share.
Earlier this month, CIBC announced it would take a $420-million, non-cash goodwill impairment charge in the quarter related to the Caribbean, and another $123 million of after-tax of loan losses.

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