CIBC is locked in a potentially expensive dispute with Canadian tax authorities.
In its quarterly earnings report on Wednesday, CIBC revealed that early in August, the Canada Revenue Agency moved to disallow the bank's deduction of a $3-billion Enron lawsuit settlement, struck back in 2005.
CIBC plans to go to court to fight for the deduction, and believes it will win. If it prevails, the bank says it anticipates booking an additional $214-million tax benefit.
But if CIBC loses the case, the bank faces paying $826-million of additional tax, plus interest. That is a major hit, equal to 8 per cent of the bank's capital base. CIBC's profit in the third quarter was $434-million.
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