CIBC is over-exposed to mortgage market says analyst

The Big Six banks began reporting their latest financial results this week and CIBC revealed figures that exceeded expectations. However, some analysts are concerned about the lender’s exposure to the residential mortgage market.

"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," Jim Shanahan of Edward Jones told BNN.

He added that with CIBC’s book of uninsured mortgages and home equity loans running at 5.4 times its regulatory capital, it is more exposed than its peers and has increased that exposure from 4.7 times regulatory capital a year ago.

Among other banks that have reported so far, RBC’s exposure is 3.5 times capital and Scotia is at 2.6 times, down from 3.1 a year ago.

The bank says that most of its loans have low loan-to-value ratios and high credit scores.

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