Canadian Imperial Bank of Commerce (CIBC) (TSX:CM)'s profits in the fiscal third quarter took a hit as the Toronto-based bank set aside additional provisions for credit losses as consumers and businesses alike struggle to repay their debts amid inflationary pressures.
The bank joined its 'Big Six' Canadian bank peers in guarding against bad loans, a trend that dragged down earnings across the sector.
For the quarter, CIBC reported earnings per share of C$1.52, down from C$1.85 in the year-ago quarter and missing the analyst estimate of C$1.68.
The bank set aside provisions for credit losses totalling C$736 million, far more than the C$465 million expected and a jump from C$243 million for the same period in 2022.
CIBC said its provision for credit losses on performing loans was up due to a more unfavourable change in their economic outlook, while provisions for credit losses on impaired loans increased due to higher impairments across all its business units.
Revenue of C$5.85 billion, however, topped expectations of C$5.81 billion.
CIBC shares were halted at Thursday’s open. They closed modestly lower on Wednesday, down 0.5% at C$17.11.
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