- Key insight: CIBC's most tariff-sensitive loans amount to a tiny fraction of its overall loan portfolio, according to Chief Credit Officer Frank Guse.
- Supporting data: The net interest margin for the Canadian bank's U.S. operations dipped by 14 basis points to 3.76%, due in part to stronger credit quality.
- Expert quote: "Loans are getting repriced down the price grid, which implies improving credit quality." — Kevin Li, CEO of CIBC Bank USA
Like several of its north-of-the-border competitors, Canadian Imperial Bank of Commerce got an earnings boost last quarter from its U.S. operations, which showed strong loan growth and resilient credit quality.
CIBC's U.S. efforts, centered around its Chicago-based CIBC Bank USA subsidiary, focus on commercial and commercial real estate lending.
The U.S. operations produced net income of USD $228 million during the quarter that ended on July 31, up 23% from the same period in 2025. Average loans of $41 billion and average deposits of $34 billion represented year-over-year increases of 9% and 14%, respectively. Revenue reached USD $618 million, up 7% from July 31, 2025.
CIBC's positive U.S. trendline mirrored the results disclosed this week by Toronto-based rivals
Kevin Li, CEO of CIBC Bank USA, said Thursday on a conference call with analysts that his unit was able to achieve "very strong loan growth" despite fierce competition.
"Yes, it's competitive for high-quality borrowers, that's for sure," Li said.
Reflecting that competition, CIBC's U.S. commercial and wealth unit reported a quarterly net interest margin of 3.76%, down from 3.90% for the three months ending April 30. Li acknowledged the downside but also said the compression is indicative of solid credit quality.
"About half of the difference in pricing actually relates to client situations where credit profile is improving," he said. "Loans are getting repriced down the price grid, which implies improving credit quality."
Indeed, CIBC's third-quarter provision for credit losses for its U.S. commercial banking and wealth segment totaled CAD $37 million, down from CAD $57 million a year ago. The U.S. group's performance "remained strong," CIBC Chief Credit Officer Frank Guse said on the conference call.
Quarterly profit growth within CIBC's core Canadian commercial banking and wealth management business was more modest, with net income in that segment rising 4% year over year to CAD $619 million.
Across the entire company, CIBC reported quarterly net income totaling CAD $2.4 billion, a 15% improvement from the comparable 2025 figure.
Renewed trade tensions cast a shadow
Guse said CIBC's overall credit performance remained strong last quarter, "even as the macro backdrop continued to evolve." Across the company, CIBC reported CAD $444 million of net loan writeoffs, level with the previous quarter and up slightly from a year ago.
But amid last week's collapse of trade negotiations between Canada and the United States, which led both countries to impose steep tariff increases,
For his part, Guse said Thursday that CIBC is well-positioned to weather the trade storm. He noted that CIBC's "most sensitive business lending exposure to the tariff impact" amounts to less than 1% of its total loan portfolio.
"We have built additional reserves for tariff-related risks through expert credit-judgment overlays beginning since the beginning of fiscal 2025 and continued to build our allowance this quarter," Guse added.
