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File photo of a CIBC branch in downtown Toronto.

Mark Blinch/Reuters

Canadian Imperial Bank of Commerce's profit slipped in the fourth quarter, capping off a year with muted growth, although core earnings were encouraging.

Canada's fifth largest lender reported earnings of $836-million, down slightly from the $852-million it made in the same quarter of 2012. However, on a per share basis, earnings amounted to $2.05 per share, up from $2.02 a year prior.

Despite encouraging revenue from its core businesses, CIBC incurred a number of small charges during the fourth quarter, hindering its performance. These include a $39-million hit for restructuring FirstCaribbean International Bank Ltd., a $35-million charge for an impaired equity position and a $24-million expense for marketing credit cards.

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CIBC did not raise its dividend, a move that will surprise the investors and analysts who were counting on a hike.

Over the full fiscal year CIBC made $3.4-billion, a tad more than the $3.3-billion earned in 2012, amounting to just 3 per cent growth.

Stripping out the extra charges in the fourth quarter, CIBC made $905-million, or $2.22 per share, beating analyst expectations for adjusted earnings. However, analysts may not have accounted for all of the charges.

CIBC's earnings demonstrated healthy retail and business banking results, with revenues climbing higher and provisions for credit losses falling. The unit made $610-million last quarter, up from $569-million the year prior.

Wealth management was a highlight, much like it was for Bank of Montreal and National Bank of Canada. Earnings continue to be boosted by the acquisition of American Century and the profit of $104-million was higher than both the same period last year, as well as last quarter, which was a record quarter for the entire bank.

Capital markets earnings of $210-million bounced back from the fourth quarter of 2012 but continue to be hard to predict.

CIBC is in the midst of a Canadian banking transformation. In 2012 the bank ended its brokered mortgage business, which compensated external brokers for finding new mortgages, and this year CIBC took a backseat behind Toronto-Dominion Bank as the secondary card issuer for the Aeroplan loyalty rewards program.

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CIBC's credit card gambit is predicated on beefing up its own Aventura rewards card and marketing it heavily to attract new clients.

A positive outcome from these changes is crucial for CIBC. While many Canadian banks are inclined to grow their business outside of Canada's borders, or to beef up business lines such as capital markets and wealth management, CIBC still makes roughly 70 per cent of its profit from plain vanilla retail and business banking.

Credit cards in particular are important to the bank's bottom line. During the Aeroplan negotiations, CIBC disclosed that roughly 11 per cent of its total profit in 2012 came from its Aeroplan partnership.

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