DBRS Ltd. has revised all its rating trends on CIBC to stable from negative, as the bank has shed exposure to certain risks, the rating agency said Wednesday.

DBRS says that the move to a stable trend reflects its view that “actions taken so far by CIBC to reduce its exposures in the structured credit runoff business should help to limit the losses on both earnings and capital.” It says that it expects the bank to continue to proactively reduce its structured credit runoff portfolio exposures.

The rating agency moved the bank to a negative trend in April 2008. Since that negative trend was placed on the ratings, DBRS says that the bank’s total gross exposures in the structured credit runoff business have been decreasing, from a high of US$79.5 billion at January 31, 2008 to US$32.3 billion at October 31, 2009.

DBRS adds that the bank has also taken actions to improve risk management, including changing senior management, increasing the depth of its senior risk management team, and revamping the risk management process and procedures. It allows that while it is difficult to assess the effectiveness of these changes, “so far earnings from core businesses remain within our expectations, given weak credit markets in Canada.”

“Nevertheless, any material weaknesses in risk management that affect the consistency or sustainability of earnings will have a negative impact on CIBC’s ratings,” it stresses.

In teh meantime, all of the agency’s ratings on CIBC have been confirmed at their current levels. “CIBC’s current ratings are supported by its lower-risk retail business mix and progress made in improving its expense ratio, which should contribute to earnings stability and improved capital levels, thereby better positioning CIBC to weather future downturns. The capital markets business, which is now more Canadian client-focused, should deliver more consistent and sustainable performance than it has done over the last several years,” it says.

IE