Canadian Imperial Bank of Commerce will curb its U.S. office investment activity due to weakness in the sector, Reuters reported.
The move comes as Toronto-based CIBC, one of Canada’s big-six banks, and its competitors guard against potentially sour loans that weigh on earnings, according to the news agency. CIBC reported lower-than-expected earnings in its 2023 second quarter report.
The bank blamed a threefold increase in bad-loan provisions – to $736 million in the second quarter of 2023 from $243 million a year earlier – on soft U.S. real estate and construction industries, according to Reuters.
“Where we are seeing the issues is in commercial real estate and in particular, in the institutional office space,” Shawn Beber, the bank’s head of U.S. operations, told analysts.
“It’s a part of the business we’re de-emphasizing.”
Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate.
Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s.
In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star.
Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.