BANGALORE (Thomson Financial) - Moody's Investors Service said it affirmed
its 'B-' bank financial strength and 'Aa2' long-term deposits ratings on
Canadian Imperial Bank of Commerce (CIBC) and its 'B+' bank financial strength
and 'Aaa' long-term deposits ratings on Royal Bank of Canada following their
second quarter 2008 earnings announcements.
The ratings agency said it has maintained its negative outlook on the CIBC's
ratings while the RBC's rating outlook is stable.
Moody's said the CIBC's ratings affirmation is based the bank's high level
of regulatory capital and a solid, predictable core earnings stream.
The sizable issuance of common equity in the first quarter of 2008, combined
with the earnings generation power of CIBC's Canadian retail franchise, enhances
the bank's ability to absorb further losses connected to its structured credit
run-off activities.
Moody's based its decision to continue CIBC's negative outlook on long-term
concerns with the bank's risk management discipline.
The ratings agency said RBC's ratings affirmation is based on the fact that
its losses from write-downs on a variety of structured credit activities and
expected potential future losses, are readily absorbable within the bank's
earnings and capital given its current ratings.
However, RBC's relative competitive weakness in U.S. capital markets tends
to lead to more volatility in earnings, as evidenced by its recent losses in
structured credit, it added.
TFN.newsdesk@thomson.com
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