Most analysts reckon that the USD has resumed its downward path against the worlds major currencies, after a two month hiatus. The fear is that the mess in the real estate market (via subprime mortgages) will spread to the rest of the economy, with loan defaults and a decline in consumption. In such a case, the Federal Reserve Bank would be forced to cut interest rates dramatically in order to prevent the US from sinking into a full-fledged recession, which would decrease the relative attractiveness...
CIBC’s fourth-quarter profit tops last year
April 30, 2008 on 4:06 pm | In Finance |
Fourth-quarter earnings at CIBC rose despite the bank taking a big charge related to fallout from the U.S. subprime mortgage market and the global credit crunch.
The bank said Thursday it made $884 million for the fourth quarter, or $2.53 a share. In the same quarter of last year, it made $819 million, or $2.32 a share.
CIBC took a $463-million pre-tax charge on write-downs on collateralized debt obligations and residential mortgage-backed securities related to the U.S. residential mortgage market. That charge trimmed 89 cents from the company’s bottom line.
However, a $456-million pre-tax gain from restructuring of Visa wound up adding $1.13 to CIBC’s per-share profit.
“CIBC delivered good overall financial results in 2007, underpinned by our progress against our priorities,” Gerry McCaughey, CIBC’s president and CEO, said in a release.
“However, the mark-to-market write-downs we recorded in our structured credit business were not in line with our strategic imperative of consistent and sustainable performance. Our focus in this area is on reducing existing risk,” he said.
The bank’s return on equity for the fourth quarter was 30.3 per cent, down from 32.5 per cent for the same period last year.
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