CANADIAN IMPERIAL BANK OF COMMERCE $99 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is the fifth-largest Canadian bank, with $304.0 billion in assets.
CIBC ran into trouble a few years ago, and absorbed big losses on the shut down of its U.S. retail banking operations. It also had to pay $2.8 billion to settle a class action lawsuit over its involvement with Enron. But the bank’s focus on its less risky retail businesses is now paying off.
It earned $2.32 a share (total $819 million) in its fourth fiscal quarter ended October 31, 2006, up 12.6% from $2.06 a share ($728 million) a year earlier. If you exclude unusual items, per-share income rose 38.9%, to $2.00 from $1.44. Foreign exchange losses helped cut revenue in the quarter by 14.7%, to $2.9 billion from $3.4 billion. The year-earlier figure also included several one-time gains.
CIBC is also enjoying the benefits of a restructuring. Lower revenue caused its efficiency ratio in the fourth quarter to rise to 65.4% from 60.1% a year earlier. But for the entire year, it fell to 65.9% from 86.9% in fiscal 2005.
These savings are helping CIBC expand. In December 2006, it paid $988.7 million U.S. for 39.3% of FirstCaribbean International Bank, which increased its total stake to 83.0%.
This business operates over 100 branches in 17 Caribbean countries. CIBC now aims to buy out the minority shareholders, which will make it easier to improve FirstCaribbean’s profitability.
More free cash should also let CIBC raise its $2.80 dividend (2.8% yield), and resume share buybacks. The stock has gained 30% in the past six months, but still trades at just 13.0 times the $7.59 a share it will probably earn this year.
CIBC is a buy.
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We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
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What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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Information from Other Sources: For reasons such as improving personalization of our service (for example, providing better product recommendations or special offers that we think will interest you), we might receive information about you from other sources and add it to our account information. We also sometimes receive updated delivery and address information from our shippers or other sources so that we can correct our records and deliver your next purchase or communication more easily.
We do reserve the right, however, to collect and perform statistical analyses of the internet traffic to our website for our internal use. However, information collected does not allow us to identify any individual, and will not collect any personal information of the visitor. Furthermore, we do not sell, rent or loan to any outside parties the information collected and analyzed.
Although you may be able to access some of our websites without being required to register or provide personal information, certain websites and sections of our websites may require registration. In addition, if you choose to contact us to ask a question, we will collect your personal information so that we can respond to your question.
To make the visitor’s experience on our website easier, we may use per-session “cookies” (session identifiers) to track the state of the visitor session. This “cookie” is destroyed when your session with our website is over.
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Does TSI Network Use the Information It Receives?
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Except as provided herein, TSI Network will not sell or rent personal information about you to unaffiliated third parties.
We may disclose personal information you have provided through our websites, for the above purposes, to persons or companies that we retain to carry out and other activities for which you have registered or in which you have otherwise asked to participate. In particular, we may for these purposes transfer information to any country (including the USA and other countries which may not offer the same level of data protection as Canada). We also will disclose personal information if required by law, including compliance with warrants, subpoenas or other legal processes.
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How do I withdraw my consent to use Personal Information? Access, Correction, Inquiries and Complaints
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Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
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