Stricter new mortgage lending rules took a toll on Canadian Imperial Bank of Commerce (CIBC) as its new mortgage sales dropped by more than 40% during the third quarter. This decline was twice what was reported by other lenders.

Reuters reported that, when compared to the rest of the country’s major banks, CIBC depended most on domestic mortgage lending, leaving them weakened during a time when the overall market is slowing down, events brought about by new rules that were meant to cool housing markets in Toronto and Vancouver.

About nine months since its implementation, the new lending measures have made its presence felt as they significantly affected third-quarter results recently posted by banks. For instance, Bank of Nova Scotia disclosed that its new mortgage sales fell 22% from a year ago.

CIBC, on the other hand, which saw their domestic mortgage book grow aggressively since 2012, recorded a slower improvement since last summer. In addition, the bank highlighted the necessity to diversify from domestic mortgage lending, which resulted to its $5 billion acquisition last year of Chicago-based PrivateBancorp.

Examining this move, Edward Lewis analyst James Shanahan said: “[CIBC has] a significant amount of capital and they can deploy a lot of that into the growth of PrivateBank. This is not a particularly diversified business compared to the other (Canadian) banks so the only thing it can do is grow PrivateBank.”

Meanwhile, CIBC Chief Financial Officer Kevin Glass had in mind another way to combat the repercussion of stricter lending rules. He said CIBC may bank on its U.S. deals.

“Right now our focus is on organic growth,” he said in an interview last week. “I think at some point we may consider inorganic growth. We will think about that in the longer term.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate