Market volatility and decreasing affordability played central roles in CMHC’s Q1 performance
Interest rate volatility due to evolving market conditions, coupled with lower paid insurance claims resulting from soaring home prices, had a marked impact on the first-quarter results of Canada Mortgage and Housing Corporation.
In its Q1 2022 financial report, the Crown corporation said that on an annual basis, it saw increased volumes and higher premiums/fees received in all of its insurance products, covering transactional homeowner, multi-unit, and portfolio insurance.
“Our net income ($394 million) decreased from the same quarter last year primarily due to insurance claims which were higher than in the same quarter of last year when economic conditions significantly improved as the economy recovered from COVID-19,” CMHC said.
“In addition, we realized losses on investments sold in the quarter as a result of higher interest rates.”
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During Q1, CMHC declared $995 million of dividends to its shareholder (the government of Canada), paid in April.
“Current market conditions are leading to significant interest rate volatility and are having a direct impact on the fair value of our investment portfolio and defined benefit liabilities,” said Michel Tremblay, chief financial officer and senior vice president of corporate services at CMHC.
“We are currently well-positioned from a capital and liquidity perspective and will continue to monitor market movements in coming quarters.”
