Canadian Imperial Bank of Commerce said Friday it expects to take a charge of $463 million in the fourth quarter related to exposure to the U.S. subprime mortgage market.

What are subprime mortgages?

Subprime mortgages are those given to borrowers who can't get a conventional mortgage — usually because they have less-than-stellar credit ratings. In the U.S., the subprime market ran into serious problems when lax borrowing standards and a slumping housing market led to mass foreclosures after many borrowers defaulted once "teaser" interest rates reset much higher. In Canada, the subprime mortgage market is better regulated and much smaller than in the U.S.

The charge on collateralized debt obligations and residential mortgage-backed securities will amount to $302 million after tax.

CIBC is due to release its fourth quarter and full-year financial results on Dec. 6.

In mid-August, CIBC said it had about $1.7 billion US in the troubled U.S. mortgage market — as much as $1 billion of it relating to subprime mortgages.

On Aug. 30, the bank said that despite a $190-million after-tax charge related to the U.S. mortgage market meltdown, profit for the three months ended July 31 was $835 million ($2.31 a diluted share), compared to $662 million ($1.86 a share) a year earlier.

On Friday, the bank also said it will record a gain of $456 million pre-tax ($381 million after-tax) in the fourth quarter from the worldwide restructuring of Visa.

CIBC shares finished Friday down 9 cents at $96.24 on the TSX.