CMHC released its third quarter results, which reveal the most profitable quarter of the year – more than doubling the figures of the previous two quarters combined.
“The implementation of a new asset allocation strategy for the mortgage loan insurance investment portfolio resulted in CMHC’s net income rising to $1,747 million in the nine-month period ended September 30, 2014,” an official release from CMHC states. “In line with international practices and Canadian guidelines for mortgage insurers, CMHC raised its capital targets by 20 points during the quarter. Higher capital helps reduce government exposure to the housing market and contributes to the long-term stability of the financial system.”
The first quarter ($406 million) and second quarter ($435 million) combined for a total of $841 million.
Insurance in-force, however, dropped to its lowest mark of the year – with CMHC reporting $546 billion in Q3, compared to $551 billion in Q2 and $555 billion in Q1, respectively.
“Third quarter financial results released today show total insurance-in-force declining to $546 billion over the nine-month period, down $11 billion from December 31, 2013. CMHC expects insurance-in-force to decline gradually as normal mortgage repayments continue to offset new insurance written,” the release states. “Total insured volumes (units) in the first nine months of 2014 were 13.2% lower than the same period in 2013, largely as a result of declining portfolio business due to the portfolio allocation in place.”
Meanwhile, the overall arrears rate rose slightly to 0.34 per cent, up from 0.33 per cent in both the second and first quarters. However, 6.5 per cent fewer claims have been paid over the nine-month period of 2014.