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  5. CM: Very concerned about the mortgage issues reported today in the globe and mail Should this equity be sold? [Canadian Imperial Bank Of Commerce]
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Q: Very concerned about the mortgage issues reported today in the globe and mail

Should this equity be sold?

Thanks

Sheldon
Asked by Sheldon on July 10, 2023
5i Research Answer:

Around 65% of CBIC's loans have exposure to real estate, with 55% consumer and 10% commercial. CIBC's higher exposure to real estate does make it relatively riskier, and it is one of the smaller banks. Still, its valuation of less than 8X earnings reflects some, or even all, of this risk. We would still be comfortable owning the stock, but until recession fears go away or rates peak it may not do much. 

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