(Reuters) -Canadian Imperial Bank of Commerce reported a decline in first-quarter profit on Thursday, as the country’s weakening economy prompted it to set aside higher provisions for potential bad debts.
The Canadian economy is on the brink of a recession as a spate of interest rate hikes raised borrowing costs and worsened default risks.
The lender built C$585 million in provisions, up C$290 million from the year-earlier quarter.
Earlier this week, peers Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia and National Bank of Canada said they built larger provisions to prepare for bad loans and warned that growth would be muted until rates begin falling.
The country’s fifth largest lender reported an adjusted net income of C$1.77 billion ($1.30 billion), or C$1.81 per share, for the three months ended Jan. 31, compared with C$1.84 billion, or C$1.94 per share, a year earlier.
($1 = 1.3586 Canadian dollars)
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Shinjini Ganguli)
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