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The Business Review Canada Weekly Roundup

|Aug 29|magazine15 min read
CIBC Third Quarter Profits Exceed Expectations
The banks profits soar as it plans a stock buyback.

Canadian Imperial Bank of Commerce (CIBC) just reported its third quarter profit at $890-million, making that the bank’s best profit ever.

The earnings amounted to $2.16 a share, beating the expectations of analysts, marking CIBC as the fourth bank to do so this reporting season. The profit resulted in an 8 percent rise from the same time period in 2012.

CIBC eliminated one-time items and made $943-million, or $2.29 a share, exceeding expected adjusted earnings of $2.13 a share. The banks dividends remain unchanged, but it did announce plans to purchase up to eight million shares in a buyback.

The bank failed to acknowledge any progress regarding the Toronto-Dominion Bank to divvy up its Aeroplan credit cards, but some say those discussions continue.

A revamp of its key Canadian operations over the past year has helped it retool for the future.

In June CIBC announced it would wind down its brokered mortgage business, FirstLine, after it failed to find a buyer for the brand. The business model indicated that CIBC paid brokers fees for finding new mortgages. By eliminating this business and bringing in new mortgages on its own, CIBC anticipates better margins. The change did come with risk as brokers can be a reliable source for new business.

CIBC Third Quarter Profits Exceed Expectations

CIBC is also renegotiating the terms of its long-term arrangement with Aimia Inc, the parent company of Aeroplan. The contract with Aimia, which appoints CIBC as the main issuer of Aeroplan credit cards, ends on Dec. 31. The parties have held passionate discussions for the past few months. CIBC took the disagreements public in May by threatening to dispose of the relationship during its last quarterly conference call. Aimia fought back in June when it signed a 10-year deal with Toronto-Dominion Bank to make the bank its new primary card issuer, and now the three companies are in talks to negotiate a three-way partnership. 

Shopify Jumps From Web To Storefront
The tech company is expanding and diversifying its offerings.
Shopify Jumps From Web To Storefront

One of Canada’s hottest startups is growing. Shopify Inc, helps retailers set up online storefronts and run their shopping cart systems, is breaking into the business of brick-and-mortar retailers.

The company based in Ottawa, is going to launch a comprehensive system that assists retailers in running their entire operation, from the cash register to inventory management. Shopify originally attracted tens of thousands of retailers by offering a system that allows its users  to setup a web-based store front in moments.

McDonald's To Start Offering Meatless Menu Items
McDonald's is taking another stab at meatless menu options in Canada after more than a decade.
McDonald's To Start Offering Meatless Menu Items
After the failure of the veggie burger experiment from 2002-2004, the fast-food giant is not reintroducing that particular menu item. Instead, the new menu items are going the route of a meatless McWrap that aims at the 71 percent of Canadians who seek meat free options “at least sometimes.”
The $645 million sale helps Maple Leaf focus on other parts of the business.
Maple Leaf Foods Sells Rothsay

Maple Leaf Foods Inc is starting to focus on the basics of selling meat and bakery products to consumers and getting out of the animal parts rendering and biofuel business after 30 years.

The food giant is selling its subsidiary Rothsay to Darling International, in Irving, Texas for $645 million. The sale includes five rendering plants in three provenience's along with a biofuel factory in Quebec.

Ottawa Gives $14M To Boost Beef Industry

The investment can help Canada invest in helpful research to break into international markets.
Ottawa Gives $14M To Boost Beef Industry
A $14 million federal investment into research and innovation should help keep Canada’s beef industry competitive in the world market, said Gerry Ritz the Agriculture Minister, at news conference on Tuesday.