TORONTO – CIBC (TSX:CM) says it will wind up operations at its FirstLine Mortgage business after it failed to find an acceptable buyer.
The big Canadian bank said Wednesday it couldn’t find an acceptable deal after trying since March to shop around its FirstLine mortgage-broker unit.
The bank will stop selling new mortgages through the division as it moves to exit the business in favour of selling CIBC-branded mortgages, which have better margins.
“We conducted a review of our strategic options concerning FirstLine Mortgages, including a potential sale of the origination platform while keeping the portfolio and focusing on renewals through the CIBC branch network,” the bank said in a statement Wednesday.
“We determined that an acceptable deal to sell FirstLine’s mortgage origination platform could not be reached and concluded that it is preferable to cease originations from this brand.”
The bank said in March it’s the right time to sell its mortgage-broker business given that CIBC-branded mortgages grew at a 10 per cent rate over the past year compared with an industry average of seven per cent.
The move will allow it to offer a number of products rather than just a specific mortgage through an arms-length broker.
CIBC has more than 41,000 employees across its operations including retail and wholesale banking and financial services, serving more than 11 million customers.
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