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Expect to hear lots of questions about CIBC's past during the bank's analyst call Thursday afternoon, and with any luck, some hard questions on its future as a retail bank.

CIBC reported fourth-quarter results and writedowns that were largely in line with expectations, posting a $436-million quarterly profit. For the year, the headline numbers are a  loss of $2.1-billion after writedowns on the bank's U.S. structured credit portfolio that now stand at $4.9-billion.

Now, here's where there's potential for fireworks when CIBC brass talk to the analysts. In step with peers, CIBC is shifting the accounting treatment of certain holdings in its credit portfolios. John Aiken at Dundee Securities has already fired out a note that says the "massive moving parts do not inspire confidence."

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What's raised Mr. Aiken's dander? Well, one issue flagged by that Dundee analyst is that CIBC posted a quarterly loss of $400-million on that credit portfolio, but "this loss was offset by a change in valuation methodology to internal modelling from relying on external, arguably liquidation, quotes. This benefited CIBC by $300-million."

CIBC has made a number of other accounting changes, equally material, and can expect to be challenged. There's nothing some of the analysts enjoy more than a good dust-up with management over reporting issues.

However, BMO Capital Markets analyst Ian de Verteuil, no slouch when it comes to decoding accounting, pumped out a note Thursday that said "while some will haggle over the benefit from the accounting changes, we believe this will miss the big picture."

Mr. de Verteuil pointed out that CIBC has the strongest balance sheet of any Canadian bank, "de minimus" sub-prime exposure and a manageable exposure to CLOs - collateralized loan obligations. Mr. de Verteuil favours this stock, and correctly predicted CIBC's shares would jump on release of the quarterly numbers.

"This bank is largely a retail institution with little non-Canadian operations," pointed out Mr. de Verteuil. Which brings us to the issue of where this bank is going.

CIBC is far more narrowly focused that any of its rivals. In part out of necessity, CEO Gerry McCaughey has based a large part of his growth strategy on building domestic operations such as wealth management.

And right now, those divisions aren't growing. Domestic retail banking is intensely competitive, with market leaders TD Bank and Royal Bank setting a scorching pace. Pulling reports for yet another analyst, Robert Sedran at National Bank Financial said Thursday: "CIBC Retail Markets (which includes wealth management) was down 10 per cent year-over-year. The weak retail result was from a combination of the higher loan losses and lower wealth management revenue."

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So, along with the nuances of bank accounting, listen hard in CIBC's conference call for plans to get the retail division revved up. If Mr. de Vereuil's got it right, and he usually does, then the worst of the credit crunch is over for CIBC. Going forward, the branch-by-branch, customer-by customer fight for business will become critically important to the fortunes of this bank.

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