The outlook for Canadian Imperial Bank of Commerce’s struggling Caribbean operations continues to dim, with the lender recording a $420-million after-tax goodwill writedown on the operations.
“In light of persistently challenging economic conditions in many Caribbean countries and our current expectations for conditions going forward, we have reduced the carrying value of the goodwill related to CIBC FirstCaribbean,” the bank said in a statement.
The bank also announced the unit has recorded new loan losses worth $123-million after tax.
The Caribbean has been a tough market for Canadian lenders, with Royal Bank of Canada also suffering, as well as Bank of Nova Scotia to a lesser extent.
Although Canada’s banks have long operated in the region, a number of them doubled down on their Caribbean operations when the global economy was on fire leading up to the financial crisis. Since the market meltdown in 2008 and 2009, however, tourism levels have suffered, and loans made to develop new resorts and to fund business expansions have been suffered.