CANADIAN IMPERIAL BANK OF COMMERCE $97 - Toronto symbol CM

CANADIAN IMPERIAL BANK OF COMMERCE $97 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.4 million; Market cap: $38.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.cibc.com) took control of FirstCaribbean, which offers banking services in 17 Caribbean countries, in December 2006. CIBC now holds a 91.7% stake. The region’s slow growth and high unemployment have prompted CIBC to write down the value of this investment by $420 million.

Due to this charge, as well as costs to launch a new loyalty plan for travellers after it lost the Aeroplan contract, CIBC’s earnings in the quarter ended April 30, 2014 fell 64.5%, to $306 million, or $0.73 a share. If you exclude all unusual items, the bank earned $887 million, or $2.17 a share. A year earlier, CIBC earned $862 million, or $2.09 a share.

Revenue rose just 1.4%, to $3.17 billion from $3.12 billion, mainly due to the loss of the Aeroplan deal.

The bank gets over 85% of its revenue from its Canadian operations, but it continues to expand its international wealth management operations.

As well, it just raised its quarterly dividend by 2.0%, to $1.00 a share from $0.98. The new annual rate of $4.00 yields 4.1%.

CIBC is still a buy.

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