CIBC makes big gains from structured credit mark-up

CIBC kicked off the Canadian bank reporting season by reporting a big boost from revaluing its structured credit book. The bank said it gained CAD85 million in the fourth quarter, which ended on 31 October, from marking up its run-off structured credit activities.

A growing number of banks that have taken big write-downs on CDO and RMBS holdings have recently begun to record gains as the value of these positions rises. CIBC was a big player in negative basis trades in which it bought structured products and hedge them with monolines.