OTTAWA, Canada — The Canadian government has announced plans to liquidate Canadian Commercial Bank only five months after arranging a $186-million U.S. bail-out of the institution.
Minister of State for Finance Barbara McDougall said in a statement late Sunday that the bank was no longer viable and could not pay its debts. It is the first forced liquidation of a Canadian bank in at least 50 years.
At the same time, the federal government said it would reorganize the Calgary-based Northland Bank, which has assets of $992.8 million. Northland, which never recovered from the 1982 economic recession, recently sold off $73 million worth of doubtful loans.
Small Profit at Northland
Despite its problems, Northland maintained a small profit. It recently announced net income of $1.53 million for the nine months ended July 31, down slightly from $1.68 million a year earlier.