CIBC Financial News

Canada’s largest banks took higher provisions for credit losses and classified more loans as impaired in their fiscal first quarters, but showed resilience in other areas, an indication that the country’s lenders are weathering a softening economy brought on by higher interest rates.

(Reuters) -Canadian Imperial Bank of Commerce exceeded estimates for first-quarter profit on Thursday, driven by gains in its domestic personal and business banking unit that offset a blow from higher provisions it set aside for potential bad debts.

TORONTO — CIBC reported a first-quarter profit of $1.73 billion as its revenue rose five per cent compared with a year earlier.

With most of Canada’s biggest banks exposed to the United States commercial-property market, the deteriorating quality of some real estate loans could lead to nasty surprises as lenders report fiscal first-quarter results this week.

Ultra low-cost carrier Lynx Air will be ceasing operations after obtaining creditor protection under the Companies’ Creditors Arrangement Act, the company said late this week. The Calgary-based airline said operations will halt effective 12:01 a.m. MT on Monday, with flights continuing to operate until that time. The Financial Post’s Denise Paglinawan and Shantaé Campbell explain what that means for customers who are currently travelling and those who have booked tickets for future flights.

Canada’s inflation rate slowed to 2.9 per cent in January, marking the first time since June that it has fallen within the Bank of Canada‘s target range of one to three per cent.

inflation rate has edged up and down over the last several months after dropping from its 2022 highs as global price pressures fade and the economy cools.Statistics Canada is set to release its January consumer price index report on Tuesday and forecasters expect Canada’s inflation rate fell. RBC, CIBC and TD all project the annual rate eased to 3.2 per cent, down from 3.4 per cent in December.Nathan Janzan, RBC’s assistant chief economist says the slowdown was likely driven by energy and food prices.“Gasoline prices were lower than a year ago in January and food price growth probably continued to slow on a year over-year-basis,” he said.“I think the attention will be more focused on the other components of CPI, just watching for signs that broader inflation pressures are continuing to slow, if only at a gradual pace.”As high borrowing costs cause consumers and businesses to pull back on spending, inflation is expected to slowly inch closer to the two per cent target by the end of the year.But unlike what’s typical when interest rates rise, the housing market won’t be helping the economy slow.

Canadians appear to be focusing less on saving for retirement and more on trying to make ends meet, though most still want to retire early.

Good morning,

The Bank of Canada threw in a few surprises into what most thought would be a predictable interest rate hold yesterday.

TORONTO — The head of Canada’s banking regulator says he’s ramping up scrutiny of money laundering in the financial sector as risks increase.

As the risk of sizable losses on commercial real estate loans grows, Canadian banks’ earnings are poised to take a hit, according to the head of Canada’s financial-system regulator.

Canada’s holiday sales period got underway in November with a 0.2 per cent decline in retail sales led by falling purchases at food and beverage retailers.

A pair of surveys released from the Bank of Canada on Monday show many firms’ price plans are “slowly returning to normal” after a period of elevated inflation, thanks in part to a slowdown in consumer spending and easing in the labour market.

Canadian Imperial Bank of Commerce is looking to off-load loans on struggling United States office properties.

By Ketki Saxena

Barclays PLC has hired Ryan Voegeli as its new head of investment banking in Canada, adding to a slate of new leaders after it experienced a series of high-level departures last year.

By Nivedita Balu

This article is part of Global News’ Home School series, which provides Canadians the basics they need to know about the housing market that were not taught in school.

Williams pushed back against the market's rate cut expectations, though the index remained on track for its worst weekly performance in a month. The dollar tumbled broadly after updated interest rate projections of Fed officials released on Wednesday showed an expectation for 75 basis points in cuts in 2024. Fed Chairman Jerome Powell was also interpreted as striking a more dovish tone at the conclusion of the U.S. central bank's two day meeting, when he said that the tightening of monetary policy is likely over, with a discussion of cuts coming «into view.» But Williams said on Friday that «we aren't really talking about rate cuts right now» at the Fed and it's «premature» to speculate about them. «It strikes some of the similar tones that we heard from Powell earlier this week but it kind of reinforces the fact that the Fed is still very much a data dependent bank and not really endorsing what the market's pricing in to a degree,» said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto. Rai also noted that a large part of the move in the dollar this week has been due to rebalancing positions that were heavily tilted towards the greenback and focused in specific currency pairs, such as against the Japanese yen. «This is a story about the inordinate amount of leverage and skewed positioning in the market that needed to be rebalanced more than any sort of dovish interpretation of what Powell said earlier this week,» he said. Traders are pricing in aggressive expectations for rate cuts, with the first reduction seen likely in March and 145 basis points in cuts seen by December. The dollar index was last up 0.39% on the day at 102.35.

FINTRAC is Canada’s primary financial intelligence unit, reporting to the minister of finance. It is also the country’ anti-money laundering and anti-terrorist financing supervisor. Based in Ottawa, with three regional offices across the country, its mandate is to ensure the compliance of businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Actand associated regulations. FINTRAC also collects financial intelligence for police, law enforcement and national security agencies to assist in the investigation of money laundering and terrorist activity financing offences or threats to the security of Canada. It can impose administrative financial penalties, as it did with the two banks, or make a non-compliance disclosure to law enforcement. “Proceeding in one manner prevents proceeding in the other,” according to FINTRAC’s website.