Cbic Mortgages

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Submitted By:                                                           Submitted To:

Simran Kaur Arora                                                   Vik Singh

991417128

Monday

8:00 am to 10:00 am

                           CBIC Mortgages

In 2016, the Canadian Imperial Bank of Commerce (CIBC) portfolio of home equity loans and uninsured mortgage is 5.4 times its regulatory capital, which higher than previous year and highest among the major banks. Moreover, the other banks have kept their uninsured mortgage market comparatively low or even reduced it by taking out portfolio insurance. The average for the CIBC, Royal Bank, Scotia Bank, and TD Bank is 3.3 times their regulatory capital.

Canada’s real estate is at a risk of correction says analyst as there was an increase in residential mortgage by Canadian Imperial Bank of Commerce while its loan delinquencies will remain stable and low.

The fact that it has continued to raise is that the CIBC bank’s exposure to residential mortgage loans is already “extraordinarily high” (Press, 2016). The bank has started taking more risk while the rules for mortgages in Ottawa have become strict.

Moreover, in Toronto and Vancouver the concerns is growing about rising household debt levels, which was recorded higher than income, and home prices

CIBC focus more on wealth management  and in fourth quarter the net income grew by $931 million, which raised a questions regarding CBICs mortgage loan. Laura Dottori-Attanasio, the Chief risk officer said that the majority of the bank’s uninsured residential mortgage loans have low loan-to-value ratios and high credit scores while the loans which are considered less risky are small in relative to the value of the house which is being purchased.

In 2013, when all the big banks have been aggressively pursuing the mortgages, so CIBC has worked hard to cut its exposure to potential losses. Canadian Imperial Bank of Commerce again looked for its brokered mortgages to mortgages originated through its Mobile Mortgage Advisors and branches. Furthermore, many analysts were concern that the high consumer debt levels may damage the bank when there is rise in unemployment or interest rate.

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