The CEOs of two of Canada’s biggest banks say liquidity troubles at mortgage lender Home Capital Group Inc. are not indicative of a broader problem, but they are monitoring their mortgage portfolios in light of concerns about high house prices.

Home Capital doesn’t pose a systemic risk because it comprises only 1% cent of the mortgage market, Royal Bank of Canada (RBC) CEO David McKay told analysts Thursday.

If Home Capital continues to experience funding problems, those loans will simply be refinanced by other lenders, McKay said.

“It is an anomaly,” McKay said after the bank reported $2.81 billion of net income during the second quarter, up 9% from a year ago.

“There really wasn’t a credit reason to drive the liquidity challenges that Home Capital faced, but more a lack of confidence based on some disclosure.”

The health of Canada’s mortgage market has been a subject of much discussion in recent weeks, particularly after customers began pulling their deposits out of Home Capital, leaving the lender in a cash crunch.

The withdrawals started after Ontario’s securities watchdog alleged the company had misled investors in how it handled a scandal involving falsified loan applications. Home Capital has said the allegations are without merit and that it will defend itself.

Victor Dodig, the CEO at Canadian Imperial Bank of Commerce (CIBC), said it’s understandable that the market has been assessing the potential implications of Home Capital’s liquidity problems on the Canadian financial system.

But Dodig also brushed aside concerns that Home Capital’s woes could metastasize to the Canadian housing market or overall economy.

“It is important to note that CIBC does not originate subprime or even near-prime mortgage loans,” Dodig said during CIBC’s second-quarter call with analysts.

“As a large, diversified and predominantly core deposit funded financial institution, we also don’t face the same funding challenges as some of the alternative lending business models. That said, we continue to closely monitor the housing market.”

CIBC reported $1.05 billion of net income during the three-month period ended April 30, up 11% from the same quarter last year.

Executives at both RBC and CIBC said they are keeping a close eye on their portfolios of mortgage loans in light of soaring house prices, particularly in the Toronto and Vancouver regions, as well as record-high household debt levels.

“While we recognize some of the concerns in the market, we remain confident in the Canadian economy, the strength of our mortgage book and our prudent credit adjudication process,” McKay said.

McKay also said he is encouraged by recent data coming out of Toronto suggesting that the supply and demand dynamic that has been driving prices through the roof has begun to ease.

Toronto-Dominion Bank (TD) also reported its second-quarter results on Thursday, saying it had $2.50 billion of net income during the second quarter, up 22% from the same period last year.

The bank also announced it has concluded a review of its sales practices following allegations contained in a CBC news report that said some of its employees allegedly broke the law in order to meet aggressive sales targets.

TD CEO Bharat Masrani said the review confirmed his belief that there is no widespread problem involving unethical sales practices at the bank.

“I value the assessment and there are some ways that we can continue to improve,” Masrani said during a conference call.

Teri Currie, TD’s group head of Canadian personal banking, said the bank will be acting on the recommendations stemming from the review, which include creating more training opportunities for first-line management.

The Financial Consumer Agency of Canada launched its own review of business practices in the financial sector after the accusations surfaced.

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