Analyst Note| Eric Compton, CFA |
Narrow-moat-rated Canadian Imperial Bank of Commerce reported fiscal third-quarter adjusted EPS of CAD 3.93, solid year-over-year growth compared with CAD 2.71 in the same period a year ago and higher than last quarter’s CAD 3.59. Provisioning continues to be a major driver of improved earnings, coming in at a net benefit of CAD 99 million this quarter, a multiyear low and materially lower than the CAD 525 million charge the bank took in the third quarter of 2020. This aligns with our view that the Canadian banks will be fine from a credit perspective and that better results should be the norm going forward. We still expect the return of fee growth and much lower provisions to drive solid earnings growth for the rest of the year, while the lack of a boost from lower provisioning should make for tougher comparisons for the Canadian banks in 2022.