(Bloomberg) -- Canadian Western Bank said it delayed the release of its fiscal fourth-quarter earnings Friday because it received a legal claim against a bank division that needed investigation.
The case won’t affect its sale to National Bank of Canada, it said.
The claim involving CWB Maxium Financial Ltd. contains “allegations of unethical conduct by a named individual” who is a sales agent of Maxium, the company said in a statement Saturday. Canadian Western said the claimant is seeking damages of C$18 million ($12.7 million) related to loans that were granted to affiliated companies.
“Based on current knowledge, we do not expect the outcome of this claim to have a material effect on the consolidated financial statements,” the bank said in the statement.
Analysts expect Canadian Western to report earnings about C$85 million on an adjusted basis for the quarter ended Oct. 31, according to data compiled by Bloomberg.
The bank said the case is unrelated to its potential acquisition by National, which was announced in June and valued Canadian Western at about C$5 billion. CWB said it still expects the deal to close on the same timelines as before. The transaction has received the blessing of competition authorities in Canada but still needs the approval of the government.
Shares of Canadian Western dropped more than 5% Friday in Toronto, erasing more than C$300 million ($212 million) in market value for its biggest single-day fall since May 2023. The lender issued a news release before the market opened Friday morning that pledged to report the results by mid-December and canceled a scheduled conference call.
--With assistance from Susanne Barton.
(Updates with additional information on the legal case, beginning in the third paragraph.)
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