Higher retail banking profits and special gains enabled the Canadian Imperial Bank of Commerce to report a sharp profit jump Thursday, which passed some of the increase back to investors by boostingits quarterly dividend by 10 cents a share to 87 cents.

Strength in retail markets, where profitrose14 per cent to $555 million on higher volumes, was a major factor in the increase, the bank said in a release.

Special gains from accounting changes and an income tax recovery added about $170 million, and the purchase ofa controlling interest in FirstCaribbean International Bank also increased profit.

Despite a $190-million after-tax chargerelated to the U.S. mortgage market meltdown, profit for the three months ended July 31 was $835 million ($2.31 a diluted share), comparedto $662 million ($1.86 a share) a year earlier. Revenue was $2.98 billion,comparedto $2.83 billion.

The bank said it expects to take an after-tax writedown of at least $60 million for August on mortgage investments, but has not completed the calculations.

Special factors in the profitincrease included:

  • A$70-million after-tax reversal of provisions made for litigation losses.
  • A $50-million after-tax gaindue tochanges incorporate loan credit derivatives.
  • A $48-million tax recovery "related to the favourable resolution of an income tax audit" in CIBC World Markets.

CIBC said its retail profit was helped by its credit card business, increased assets administered by CIBC Wood Gundy, growth in its mutual fund business, and "market share increases" inmortgages, deposits and fixed term investments.

Return on equityin the third quarter was 28.3 per cent, up from 27.2 per centa year earlier.

Profit for the nine months ended July 31 was $2.41 billion ($6.69 a diluted share), comparedto$1.83 billion ($5.11 a diluted share) a year earlier. Revenue was $9.12 billion, compared to$8.46 billion.

CIBC shares closed up 83 cents at $94.80 in TSX trading.