Canadian Western Bank Profit Falls on Higher Credit Provisions, Potential Sale Costs

Canadian Western Bank (CWB) reported a 20% decline in quarterly profit as it increased provisions for credit losses and incurred costs related to a potential sale.

Key Points:

• CWB's net income fell to C$49.1 million in the three months ended Jan. 31, from C$61.9 million a year earlier.
• The bank increased its provisions for credit losses by C$15.2 million to C$39.1 million, citing economic uncertainty and the impact of higher interest rates on borrowers.
• CWB also incurred C$6.4 million in costs related to a potential sale of the bank, which is currently under review.
• The bank's revenue rose 5% to C$237.6 million, driven by higher interest income and fees.
• CWB's common equity tier 1 (CET1) capital ratio, a measure of financial strength, remained strong at 12.1%.

CWB's results were in line with analyst expectations. The bank's shares were down slightly in premarket trading.

CWB is one of Canada's largest regional banks, with operations in Western Canada and Ontario. The bank has been exploring a potential sale for several months, but no deal has been announced yet.

The bank's latest results suggest that it is facing some challenges, but it remains financially strong. CWB's provisions for credit losses are still relatively low compared to some of its peers, and its CET1 capital ratio is well above the regulatory minimum.

CWB's potential sale is still up in the air, but the bank's latest results show that it is well-positioned to weather the current economic uncertainty.