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CIBC stock dives after fiscal Q4 results miss estimates as NIM slides

Canadian Imperial Bank of Commerce (NYSE:CM) stock dropped 5.5% in Thursday afternoon trading following its weaker-than-expected fiscal Q4 results that highlighted a slowdown in its profit margin from lending.

Q4 adjusted EPS of C$1.39 (US$1.87), falling short of the C$1.72 average analyst estimate, dipped from C$1.85 in Q3 and from C$1.68 in Q4 2021.

Adjusted revenue of C$5.39B for the three months ending October 31, also missing the C$5.62B consensus, slipped from C$5.57B in the prior quarter and increased from C$5.06B a year earlier.

CIBC's provision for credit losses mounted to C$436M from C$243M in Q3 and C$78M in Q4 of last year, as the lender continues to prepare for an increasingly uncertain economic outlook.

In response to prospects for slower global economic growth in 2023, "we are going to continue to take actions to reposition our business to adjust to these new realities, but also continue to grow our client franchise and moderate our expense growth in 2023 to the mid single-digit range," CEO and President Victor Dodig said during his company's Q4 earnings call.

Net interest income came in at C$3.19B, down from C$3.24B in Q3 and up from C$2.98B in Q4 2021. Net interest margin of 1.33% vs. 1.43% in Q3 and 1.41% a year before.

Net income for its Canadian Commercial Banking and Wealth Management segment was C$469M compared with C$484M in Q3 and C$442M in Q4 2021, due to higher revenue partially offset by higher expenses.

U.S. Commercial Banking and Wealth Management unit saw net income of C$161M in Q4, down from C$193M in Q3 and C$256M in the year-ago quarter, driven by higher net interest income, partially offset by higher expenses and lower fee income.

Capital Markets net income of C$378M fell from C$447M in Q3 and unchanged from a year ago given higher revenue partially offset by higher expenses.

Canadian Personal and Business Banking net income was C$471M dipped from C$595M in Q3 and C$597M in Q4 2021, as higher expenses were partially offset by higher sales.

Earlier, CIBC raised its quarterly dividend by 2.4% to C$0.85 a share.