No, brokers, it wasn’t all in your head. CIBC’s latest financials confirm the bank has actively been shifting its mortgage focus back to the branch and away from the broker channel, ahead of putting FirstLine on the auction block.
“CIBC has been increasing emphasis on its branch and related CIBC branded channels and de-emphasizing its non-branded channels,” reads the bank’s news release announcing its first quarter results.
It’s also confirming the bank’s decision to seek buyers for Firstline.
“We do not expect this process will be a lengthy one,” says David Williamson, CIBC’s senior executive VP of retail banking, speaking to the “potential sale” of the broker channel lender. “Once this process is complete, we plan to increase renewals into our CIBC brand from the FirstLine platform over time. Benefits of this will include higher NIMs and deeper relationships as these clients enter into CIBC branded channels.”
That last statement may be a call to action for broker-partners of FirstLine, encouraging them to reach out to clients they've placed with the lender to ensure they retain them after any sale. That notwithstanding, FirstLine will continue to originate mortgages until such time as a sale.
Many brokers have already moved to up their communication with those clients following reports last month that CIBC was actively look to shed the channel operation.
“I am confident that mortgage brokers and those that support the channel, including lenders and insurers, will seize that opportunity,” Jim Murphy told MortgageBrokerNews.ca in February, confirming CIBC’s game plan.
The loss of FirstLine, which CIBC acquired from Manulife, is something several brokers across the industry had already begun to brace for, with the lender’s decision to cut the BFS segment from its product line.
CIBC’s decision to keep those options available to clients of its branches has angered brokers, at the same time it has fueled talk about the bank’s plans to sell the asset.
That sale would likely be completed at some point during the current fiscal year, although it is uncertain whether the sale would be limited to FirstLine’s existing book or if the business would remain a going concern.