Abogados de Inmigracion

Unlike other types of obligations such as mortgages or car loans, credit-card debt is unsecured, leaving the lender with limited options if things go wrong.

Yesterday, however, investors focused on CIBC's profit, which rose to $644-million in the fourth quarter, up 48% from the same quarter the year before. Its shares closed up $1.52 to $70, their highest level in more than a year.

"If [CIBC] is right and the economy's going to recover imminently, that's great, but if 2010 turns out to be worse than expected, they will be impacted significantly," said Brad Smith, an analyst at Blackmont Capital.

In the three months ended Oct. 31, Canada's fifth-largest bank set aside $224-million in provisions to cover bad credit-card loans, down from $248-million in the prior quarter.

Analysts estimate CIBC's credit-card portfolio at more than $10-billion.

Total provisions for bad loans at CIBC were $424-million, down from $574-million in the third quarter, reflecting the bank's view that the North American economy is on the upswing.

Toronto-Dominion Bank, which also reported yesterday, was almost as optimistic in its lower-than-expected provisioning and rosy long-term outlook, though it cautioned that the year ahead may be a bumpy ride.

On a conference call with analysts, Ed Clark, the chief executive, said he expects bankruptcies to move up in 2010 "from the extremely low levels we have seen so far," peaking below levels seen in previous recessions. By 2011, economic uncertainty will be dispelled amid rising employment and a generally brighter outlook.

Results at National Bank of Canada, which also came out yesterday, and Bank of Montreal, which came out last week, reflect similar optimism.

The trend has some analysts raising their eyebrows.

"The whole credit thing is a concern for me because there is nothing to support the levels of provisioning the banks are doing," said Mr. Smith, who argues that the past two years have been so unusual in financial markets that it impossible to predict where the economy is headed.

"You can't look to the past to support the adequacy of the provisioning," he said.

"All you can do is assume the banks have better information than I have when they say that the credit clout will clear imminently and recoveries will be very strong."

According to Statistics Canada, the Canadian economy pushed out of recession in the most recent quarter, growing at an annualized pace of 0.4%, the first sign of positive growth in a year.

But many economists worry that the picture may get cloudy again once Canada, the United States and other countries run out of stimulus money and taxpayers start paying the bill for the unprecedented bailout of the global financial system.