(Reuters) - Canadian Imperial Bank of Commerce on Wednesday fell short of profit estimates for the third straight quarter, and said it expects zero earnings growth this year, sending its shares down nearly 4%.

The Canadian Imperial Bank of Commerce (CIBC) logo is seen outside of a branch in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie

The fifth-largest Canadian lender also said expenses could rise in 2019, but added net interest margins could grow.

Weak loan growth and higher loan loss provisions hurt the bank’s bottomline in the second quarter ended April 30, as higher interest rates - which in the past had helped the bank earn more from loans, crimped borrowers’ ability to take out loans.

The lender’s shares were on track for their worst intraday performance in nearly three years, down 3.5% in midday trading. The stock had risen 10.3% since the beginning of the year as of Tuesday’s close, outpacing the 1.6% rise in the S&P TSX Diversified Banks Index.

The Bank of Canada has raised interest rates five times since July 2017, while the U.S. Federal Reserve has boosted rates six times over the same period.

CIBC’s negligible loan growth was exacerbated by a dip in home loans, which fell mostly due to stringent regulatory rules that require borrowers’ uninsured mortgages to be stress-tested to check their ability to repay.

Financial regulators are now considering changing the terms of the stress test, a top banking regulator said in February.

“The decline in domestic retail lending will likely raise additional questions as to where domestic growth will come from,” said John Aiken, an analyst with Barclays.

Net income at CIBC’s retail banking business, the company’s biggest, fell 2.4% to C$570 million ($425.8 million) from last year.

Total provisions for loan losses, or the money a bank sets aside to cover unpaid loans, rose 20.3%, while total non-interest expenses jumped 2.82% to C$2.59 billion, partially for personnel costs.

“The market for quality people is tougher than it used to be,” due to the tight labor market, though the bank has not seen ‘significant’ cost inflation as a result of that, Kevin Glass, CIBC’s chief financial officer told Reuters.

“Getting quality people is a challenge,” he added.

The bank reported adjusted earnings per share of C$2.97, which missed analysts’ estimates of C$2.99, according to Refinitiv IBES data.

Expenses for the remainder of the year are expected to remain high.

“We will continue investing in our business for the long term despite short-term pressure on revenue,” Victor Dodig, chief executive officer of CIBC, said in a conference call with analysts.

Capital markets were a bright spot in the bank’s earnings. Net income from the business rose 12%, boosted by higher underwriting and advisory fees.

Trading revenue rose nearly 7%, helped by bonds and interest rates, although equities grew marginally.

CIBC is among the first big Canadian lenders to report quarterly results. Bigger rivals Royal Bank of Canada and Toronto-Dominion Bank will report results on Thursday.