Canadian Imperial Bank of Commerce (NYSE:CM) opened fiscal 2026 with what management described as an “exceptional” first quarter, highlighted by record earnings, broad-based revenue growth, and a return on equity that exceeded the bank’s current medium-term target. Executives also emphasized continued investment in technology and AI, while maintaining a focus on disciplined execution and credit vigilance in a fluid macro environment.
First-quarter results: record earnings, diversified revenue growth
On a reported basis, CIBC posted earnings per share of CAD 3.21, up 47% from the prior year. Management said reported results included income tax recoveries, which the bank treated as an item of note. On an adjusted basis, CIBC reported earnings per share of CAD 2.76, up 25% year-over-year.
Adjusted return on equity was 17.4%, up 210 basis points from the same quarter last year. The bank noted a 13.4% CET1 ratio, which increased five basis points from the prior quarter, supported by organic capital generation and strong reported earnings, partially offset by higher risk-weighted assets and accelerated buybacks.
Margins and fees: expansion driven by mix, deposits, and constructive markets
Management highlighted net interest margin (NIM) expansion as a key driver of the quarter. Excluding trading, net interest income rose 13% year-over-year. All-bank margin excluding trading increased 17 basis points from the prior year and six basis points sequentially, which the bank attributed to higher deposits, business mix, and improved product margins.
In Canadian Personal and Business Banking, NIM improved 34 basis points year-over-year and nine basis points sequentially. Canadian P&C NIM was 300 basis points, up 10 basis points sequentially. In the U.S. segment, NIM was 401 basis points, up 17 basis points from the prior quarter, which management said was partially seasonally driven by deposit strength.
Chief Financial Officer Robert Sedran said the quarter’s margin uplift was driven roughly “a third, a third, a third” by three factors he cited: hedging/positioning, business mix, and product margin. He cautioned that the bank often sees a seasonal dip in Q2, such as lower checking and credit card balances and commercial balance roll-offs, and said a similar “basis point or two” pullback would not be surprising. Even after accounting for seasonality, management maintained its expectation for a “stable to gradual positive bias” in margins over time.
Non-interest income totaled CAD 4.1 billion, up 18%, with growth across payments, institutional, trading, and consumer fees. Market-related fees increased 18%, helped by “constructive markets,” with strong growth in trading, underwriting and advisory, and mutual fund fees. Transaction-related fees rose 10%, driven mainly by higher credit and FX fees.
Expenses and operating leverage: 10 straight quarters of positive leverage
Expenses increased 12% from the prior year, driven by increased business activity, revenue-linked costs, and technology investments across the bank. Despite the higher spending, management reported operating leverage of 360 basis points, marking the bank’s 10th consecutive quarter of positive operating leverage.
Sedran said CIBC has had “pretty good” revenue visibility and used the opportunity to advance some spending that might otherwise have occurred later, emphasizing the investments were “conscious and intentional” to support the bank’s priorities. He added that if revenue growth were to slow, management believes it has levers to pull back spending to protect the operating leverage gap.
In response to questions about efficiency in the retail bank, Personal and Business Banking head Hratch Panossian said the business is focused on scaling where costs already exist and using investments to create a “flywheel” of productivity. He cited a goal to save one million frontline hours through automation and AI-enabled use cases, which he said the bank achieved a year ahead of schedule.
Business segment performance: strength across retail, wealth, U.S., and capital markets
Management pointed to record or improved results across major segments:
- Canadian Personal and Business Banking: Revenue increased 13%, supported by margin expansion, loan growth, and higher fee-based revenue. Expenses rose 7%, primarily due to technology and strategic initiatives and higher compensation.
- Canadian Commercial Banking and Wealth Management: Revenues rose 13%. Commercial revenues increased 9%, with commercial loan and deposit volumes up 7% and 8%, respectively. Wealth management revenues grew 16%, supported by higher fee-based assets and client activity. AUA and AUM were up 14% and 15%, respectively, versus Q1 2025.
- U.S. Commercial Banking and Wealth Management: Net income increased 19%, mainly due to lower provisions and pre-provision earnings growth. Revenue increased 6%; net interest income rose 10%. Management noted lower annual performance fees in asset management and expenses up 6%, including severance and strategic initiatives.
- Capital Markets: Revenues climbed 28% and net income rose 42%. Global markets revenue grew across most products, while investment banking benefited from higher underwriting and advisory activity. Corporate and transaction banking revenues also increased on volume growth and higher fees.
During the Q&A, management addressed whether elevated capital markets performance could create an imbalance versus retail banking. Sedran said the bank’s “balance” is more about growth rates over time than relative size, noting capital markets may be benefiting from a cyclical tailwind that could normalize.
Credit quality: stable overall, with higher impairments in some commercial portfolios
Chief Risk Officer Frank Guse said credit performance in the first quarter “remained aligned with our expectations” amid tariff-related headwinds and negotiations. Total provisions for credit losses were CAD 568 million, down from CAD 605 million last quarter. Allowance coverage remained at 79 basis points.
Performing provisions were CAD 48 million, reflecting credit migration and the evolving economic environment. Provisions on impaired loans were CAD 520 million, up CAD 23 million quarter-over-quarter. Guse said higher provisions in Canadian and U.S. commercial banking were partially offset by lower provisions in capital markets and Canadian personal and business banking.
The gross impaired loan ratio was 64 basis points, up three basis points sequentially. Guse noted new formations were down, driven by fewer business and government loan formations, partially offset by higher consumer loan formations. He said mortgage loan-to-value remained strong at 57% for the overall mortgage book and 68% on impaired balances, and that the bank does not expect “material increases in losses” in the mortgage portfolio.
In Canadian consumer portfolios, 90+ day delinquencies increased quarter-over-quarter, which management attributed to the macroeconomic backdrop and some seasonality, particularly in credit cards. Net write-offs increased modestly, mainly driven by credit cards, which Guse linked to elevated unemployment and ongoing uncertainty. Despite the movement, he said the trends broadly reflected expectations and that the bank remained comfortable with its full-year guidance.
CEO Harry Culham said the bank started the year with “positive momentum,” emphasizing strong client relationships, continued execution on strategic priorities, and preparedness for uncertainty. The bank also highlighted capital returns, noting it returned roughly 78% of earnings to shareholders during the quarter through dividends and CAD 8 million in common share buybacks.
About Canadian Imperial Bank of Commerce (NYSE:CM)
Canadian Imperial Bank of Commerce (NYSE: CM), commonly known as CIBC, is a major Canadian financial institution headquartered in Toronto. Formed in 1961 through the merger of the Canadian Bank of Commerce and the Imperial Bank of Canada, CIBC is one of Canada’s largest banks and provides a broad range of banking and financial services to retail, small business, commercial and institutional clients.
CIBC’s activities span personal and business banking, wealth management, capital markets and corporate banking.
