By Nivedita Balu
(Reuters) -Shares of Canadian Imperial Bank of Commerce hit a record high on Thursday after the bank's fourth-quarter profit surpassed analysts' forecasts and it set aside less than expected to cover potential loan losses.
The stock rose as much as 5.2% to hit a record C$94.20.
CIBC, the country's fifth-largest bank, said adjusted income rose 24% to C$1.89 billion for the three months ended Oct. 31. On a per share basis, it earned C$1.91, beating the estimate of C$1.79.
Its provision for credit losses fell to C$419 million from C$541 million a year ago, compared with the average estimate of C$554 million, according to LSEG data.
The bank also gave its 48,000 employees a $500 bonus in either U.S. or Canadian currency depending on their location, a memo seen by Reuters showed.
For fiscal 2024 ending Oct. 31, employee salaries rose 2.4% while performance-based compensation rose 19% from a year ago.
CIBC and Royal Bank of Canada were the only two Canadian lenders to beat earnings estimates among the big five banks in the fourth quarter.
CIBC has overcome challenges in commercial real estate in the U.S. and residential mortgages in Canada over the past few quarters as it focused on credit quality.
"We're focused on continuing that momentum for fiscal 2025... it means growing our client base, it means managing our costs well, it means continuing to manage risk well, and maintaining that consistency that we have been driving," CFO Robert Sedran said in an interview.
Sedran and other Canadian bankers said the 2025 outlook 2025 was murky due to rising unemployment, mortgage renewals at elevated rates and immigration policy that could mean fewer new clients.
"As we look into the next year it is a little bit cloudier than we might like," Sedran said.
($1 = 1.4055 Canadian dollars)
(Reporting by Jaiveer Singh Shekhawat in Bengaluru and Nivedita Balu in Toronto; Editing by Pooja Desai)