Writedowns push CIBC to C$1.1 bln loss; stock falls

Thu May 29, 2008 8:39pm EDT
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By Lynne Olver

TORONTO (Reuters) - Canadian Imperial Bank of Commerce posted its second major quarterly loss in a row on Thursday on larger-than-expected charges of C$2.5 billion ($2.5 billion) for worsening structured-credit positions.

CIBC, the No. 4 Canadian bank by market value, lost C$1.1 billion, or C$3 share, in the second quarter ended April 30, as its U.S. credit securities and hedge positions kept being hammered in the credit crunch.

That compared with a year-earlier profit of C$807 million, or C$2.27 a share.

CIBC shares fell 2 percent to C$69.46 on the Toronto Stock Exchange while other big Canadian bank stocks climbed.

The bank signaled the pain may not be over, saying changing market and economic conditions for bond insurers could lead to more losses.

"In a perverse way, the higher charges are positive as they reflect more rapid writedowns of problem assets," BMO Capital Markets analyst Ian de Verteuil wrote in a research note.

Executives stressed they had taken numerous steps to improve risk-management and to get out of risky positions.

"Our objective is to be a double-A rated bank and to be seen by investors and other stakeholders as a low-risk Canadian bank with high quality earnings," Chief Risk Officer Tom Woods said in a conference call.   Continued...

<p>A Canadian Imperial Bank of Commerce (CIBC) branch is seen in Toronto November 9, 2007.REUTERS/Mark Blinch</p>