CIBC (TSX:CM) delivered stronger profits in the fourth quarter with the help of lower income-tax expenses and improved wholesale banking results, but the bank is staying cautious as it looks towards the new year.

“The external environment remains very uncertain,” president and CEO Gerry McCaughey said in a conference call with analysts on Thursday after reporting improved earnings.

“Interest rates are expected to remain low and growth rates in consumer credit are expected to slow down slightly. Demand for business credit should continue to grow which should help offset some of these headwinds,” he added.

The major bank said that net income rose to $794 million, or $1.90 per share, for its fiscal fourth quarter ended Oct. 31, an increase from $500 million, or $1.17 a share, a year ago.

After adjusting for one-time items, cash earnings were $1.87 per share, six cents higher than analysts had expected, according to a poll by Thomson Reuters, and a gain of 11% from the same period a year earlier.

Total revenue held steady at $3.2 billion from $3.25 billion in the comparable period. The bank said its return on equity for the period was 20.6%.

Shares of the bank slipped $1.21 to $71.70 on the Toronto Stock Exchange in the afternoon as investors weighed the stronger results against projected future weakness.

Stonecap Securities analyst Brad Smith said that CIBC’s revenues were a key disappointment.

“I think what’s happened is perhaps the analysts … are now looking well beyond the bottom line,” he said in an interview.

“Commerce’s earnings were at large part better than expected because of an unexplained improvement in net interest margin … that really doesn’t help people gauge the sustainability of it.”

For all of fiscal 2011, CIBC reported net income of $3.08 billion from $2.45 billion. Revenues grew to $12.25 billion from $12.09 billion.

“We continue to target our medium-term objectives that we have maintained for a number of years, including average EPS (earnings per share) growth through the cycle of five to 10%,” McCaughey said.

The bank is also targeting 20% return on equity, while paying out dividends within a range of 40 to 50% of earnings per share after preferred share payouts.

During the quarter, CIBC’s retail and business banking sector accounted for $580 million of net income — up from $505 million in the same period a year ago.

Wealth management earned $65 million and wholesale banking took in $154 million.

In July, CIBC (TSX:CM) spent US$848 million to increase its presence in the U.S. wealth management industry by purchasing a 41% stake in Kansas-based American Century Investments.

The bank said asset managers like American Century, which is a market leader, are a low volatility business with growth potential as more aging baby boomers demand retirement fund management products.

CIBC has more than 41,000 employees across its operations including retail and wholesale banking and financial services, serving more than 11 million customers.