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CIBC and National Bank of Canada deliver stronger than expected growth

TWO of Canada’s big banks kicked off earnings season with stronger-than-expected growth in profits yesterday, setting the stage for a rise in bank shares and upping the ante for rivals’ profits next week.

Canadian Imperial Bank of Commerce said profit more than quadrupled in the first quarter, helped by volume growth in its retail markets and wholesale banking, handily beating market estimates.

Canada’s fifth-largest bank said net profit rose to C$652m (£403.1m), or C$1.58 a share, for the first quarter ended 31 January. Core cash earnings were C$1.65, according to one analyst. This was well above average analysts’ expectations of C$1.41.

“The market will [quite rightfully] extrapolate these positive results to the other banks and generate a lift to the sector as positive credit and net interest income stories are likely transferable,” said Barclays Capital analyst John Aiken.

CIBC’s beat had hardly been digested when Canada’s sixth largest bank, National Bank of Canada, also came in stronger than expected.

The Quebec-based regional lender said its profit rose six per cent in the first quarter to C$268m, or C$1.55 a share, after extraordinary items, as loan volumes and market revenues rose.