CWBFG Annual Report 2022


Loans are determined to be in default and classified as impaired when payments are contractually past due 90 days or more, when we have commenced realization proceedings, or when we are of the opinion that the loan should be regarded as impaired based on objective evidence. Objective evidence that a loan is impaired may include significant financial difficulty of a borrower, default or delinquency of a borrower, breach of loan covenants or conditions, or indications that a borrower will enter bankruptcy.

Table 12 - Change in Gross Impaired Loans ($ thousands)



Change from 2021

Gross impaired loans, beginning of year


202,324 150,723


257,141 199,514


(54,817) (48,791)

(21) %

New formations


Reductions, impaired accounts paid down or returned to performing status










Total (1)







(18) %

Balance of the ten largest impaired accounts







7 %

Total number of accounts classified as impaired (2)

280 256

330 282

(50) (26)


Total number of accounts classified as impaired under $1 million (2)


Gross impaired loans as a percentage of gross loans

0.46 %

0.61 %

(15) bp

(1) Gross impaired loans include foreclosed assets held for sale with a carrying value of $2,010 (October 31, 2021 – $2,253). We pursue timely realization of foreclosed assets and do not use the assets for our own operations. (2) Total number of accounts excludes CWB National Leasing. bp – basis point

The dollar level of gross impaired loans at October 31, 2022 totaled $167 million, down from $202 million last year. This amount represented 0.46% of gross loans compared to 0.61% last year. The level of gross impaired loans fluctuates as loans become impaired and are subsequently resolved, and does not directly reflect the dollar value of expected write-offs given tangible security held in support of lending exposures. Compared to the prior year, gross impaired loans decreased across all provinces with the exception of Quebec and Manitoba. Gross impaired loans also declined across most portfolios, with the exception of our commercial mortgage and personal loan and mortgage portfolios. New formations of impaired loans totaled $151 million, compared to $200 million last year. Strong resolutions of $156 million this year were compared to $196 million last year, and reflect our ongoing proactive management of the loan portfolio by our Special Asset Management Unit, a team that specializes in resolving troubled loans and minimizing credit losses. We regularly review the overall loan portfolio and undertake credit decisions on a case-by-case basis to provide early identification of possible adverse trends. Our strong credit risk management framework, including well-established underwriting standards, the secured nature of our lending portfolio with conservative loan-to-value ratios, and proactive approach to working with clients through difficult periods has continued to be an effective approach. This is demonstrated by our history of low write-offs as a percentage of average loans, including through past periods of economic volatility. Refer to the Risk Management section of this MD&A for additional information.

30 | CWB Financial Group 2022 Annual Report

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