By Robb M. Stewart

Canadian Imperial Bank of Commerce's second-quarter earnings increased despite higher loan-loss provisions.

CIBC, one of the country's largest lenders, recorded net income of 2 billion Canadian dollars ($1.45 billion), or C$2.04 a share, for the three months ended April 30, against C$1.75 billion, or C$1.79, a year earlier. On an adjusted basis that strips out amortization of intangible assets and other items, per-share earnings rose to C$2.05, beating the C$1.88 mean estimate of analysts polled by FactSet.

Total revenue was up 14% at C$7.02 billion, topping the C$6.95 billion analysts anticipated.

That was dented by a rise in CIBC's provision for credit losses to C$605 million in the latest quarter, from C$573 million the quarter before and C$514 a year earlier. That was higher than the C$598.2 million provision expected by analysts.

CIBC said provision for credit losses on performing loans was up primarily due to an unfavorable change in its economic outlook, partially offset by credit migration in the current quarter. Provision for credit losses on impaired loans was raised due to higher allowances in Canadian personal and business banking, Canadian commercial banking and wealth management, and capital markets.

Even as mortgage stress have subsided following seven interest rate cuts through March, households and businesses have become spooked by concerns over the fallout from the Trump administration's trade policies and higher tariffs, prompting many to scale back spending and investment plans. The housing market in particular has weakened in recent months as prospective buyers have moved to the sidelines thanks to worries about job security and price pressures as tariffs and reciprocal measures imposed by Ottawa work through the economy.

Net interest income for the period increased to C$3.79 billion from C$3.28 billion a year ago thanks to volume growth across CIBC's businesses, while noninterest revenue rose to C$3.23 billion from C$2.88 billion with a lift in trading non-interest income, higher fee-based revenue and a rise in commissions on securities transactions.

The bank's common equity Tier 1 capital ratio stood at 13.4% for the three-month period, wider than the 13.1% at the end of the first quarter. The country's banking regulator requires the big banks to hold a capital ratio of no less than 11.5% of risk-weighted assets.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 29, 2025 06:12 ET (10:12 GMT)

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