Canadian Western Bank’s net income drops 6% due to loan loss provisions

CWB Financial Group (CWB) said its net profit fell 6% in its latest quarter due to more
funds set aside to cover potentially bad debts and its interest margins have shrunk.

The Edmonton-based company, also known as Canadian Western Bank, said it earned $80.8
million in net income, or $0.88 per share, for the quarter ended July 31, down from $86.3 million,
or $0.98 per share, a year earlier.

Earnings per share for the quarter are in line with the average analyst estimate compiled by Financial
data company Refinitiv.

However, the lender said its profits in the quarter were hit as the bank set aside $13.5 million.
for potential loan losses, up from $8.9 million a year ago, as it prepares for an economic crisis

The CWB Financial Group also reported that its net interest margin fell eight basis points in
quarter compared to the same period of 2021.

Funding costs rose rapidly with rising interest rates and the bank was unable to
reassessing loans to keep pace, CWB Financial said.

The bank’s revenue was $271.7 million, compared to $263.2 million in the same quarter a
a year ago, as it expanded from its traditional western Canadian market.

The lender, which focuses on small businesses, opened a bank in Mississauga, Ontario in 2020
and plans for more growth across Canada in the years to come.

CWB Financial shares are down 29% this year and trade at $25.99 per share.

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