Too Much Exposure For CIBC To The Mortgage Market

In the course of the past weeks, major banks have already started revealing their up-to-date financial results.

However, results disclosed by CIBC gained the center of attention which was far greater than anticipated.

On the other hand, few analysts are worried about the introduction of the lender to the residential mortgage market.

Jim Shanahan who works for Edward Jones commented to a news reporting site, saying; “It’s clear that they’re more exposed to a sharp reduction in real estate values in Canada than any of the other major banks.”

Additionally, he said that with the record of CIBC’s uninsured mortgages and the loans for home equity going 5.4 times more than its regulatory principal. It has more disclosure than its peers and has increased exposure over the year.

The exposure for RBC is 3.5 times capital and Scotia Bank being at 2.6 times, a decrease from a year ago by 3.1. According to the bank, majority of the loans have little loan-to-value ratios, with great credit score.