Canadian Western Bank: Sharp Increase in Coronavirus-Related PCL Affects Q2 2020 Results
Canadian Western Bank (CWB or the Bank) reported Q2 2020 net income of $57.0 million, a 27% decline from the previous quarter caused by a sharp increase in provisions for credit losses (PCL) due to the economic impact of the Coronavirus Disease (COVID-19) pandemic and lower oil prices. The net interest margin declined to 2.40% in Q2 2020 from 2.54% in Q1 2020 due to Bank of Canada (BoC) rate cuts, higher liquidity levels, and two fewer interest-earning days. Consequently, the Bank's income before provisions and taxes (IBPT) declined by 5% during Q2 2020. CWB's operating expenses remained flat during the quarter, resulting in a slightly higher efficiency ratio of 47.1% during the quarter.
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