CIBC cuts 2,400 jobs despite rising profit and dividend increase

What’s happening at CIBC?

CIBC has confirmed that it has cut nearly 2,400 jobs, representing about 5% of its full-time workforce, over the past fiscal year. The layoffs were revealed during the bank’s financial results announcement on November 30. Despite showing a healthy profit increase, the job cuts come as CIBC addresses broader financial pressures, including a notable rise in provisions for credit losses.

More details

In its presentation to investors, CIBC reported setting aside $541 million for potential bad loans, marking a 24% increase from last year.

• This move reflects growing caution amidst economic uncertainties, though the figure was slightly below market expectations.
• Despite these cuts, CIBC raised its dividend to 90 cents per share, up from 87 cents, highlighting continued confidence in its long-term profitability.
• The bank’s overall profits rose to $1.48 billion, up from $1.19 billion in the same quarter last year.

Other major banks take similar action

CIBC’s cuts follow similar moves by other major Canadian banks, all facing rising provisions for bad loans as economic uncertainty grows:

• Royal Bank of Canada (RBC): Laid off a large number of employees, and set aside $720 million for bad loans, an 89% increase from last year.
• TD Bank: TD Increased provisions to $878 million, a 42% year-over-year jump, and announced over 3,000 job cuts (3% of its workforce).
• Scotiabank: Earlier in the week, Scotiabank revealed $1.3 billion in provisions for potentially soured loans, along with a 3% cut to its workforce.

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