(Reuters) – Canadian Imperial Bank of Commerce reported a decline in third-quarter profit on Thursday as the bank set aside more funds for bad loans to cover for borrowers struggling to repay their debts in a high-interest rate environment.
In the latest set of earnings results, several lenders have increased their provisions for loan defaults as borrowings becoming pricier in a slowing economy has elevated the risk of clients falling behind on their mortgage and credit card repayments.
CIBC, Canada’s fifth largest bank by market capitalization, reported C$736 million in provisions for credit losses at the end of the third quarter, compared with C$243 million in the year-ago quarter.
Peers, Bank of Montreal and Bank of Nova Scotia missed quarterly profit estimates earlier in the week, weighed down by higher provisions.
CIBC reported adjusted net income of C$1.47 billion, or C$1.52 per share, in the three months ended July 31, compared with C$1.72 billion, or C$1.85 apiece, a year earlier.
(Reporting by Pritam Biswas in Bengaluru; Editing by Shweta Agarwal)
