* Q3 EPS C$2.77 vs forecast C$2.66
* Net income up 9 percent to C$1.17 billion
* CFO says very comfortable with mortgage exposure
* Mortgage book has grown 13 percent from year ago (Recasts, adds comments from interview with CFO)
TORONTO, Aug 24 (Reuters) - Canadian Imperial Bank of Commerce said on Thursday it was prepared to keep expanding its market share in mortgages, shrugging off concerns over a possible sharp fall in house prices which have prompted rivals to curb lending to homebuyers.
CIBC said its residential mortgage book had risen to C$197 billion ($157 billion) at the end of June, up 13 percent from a year earlier, with the bank seeing its growing home loan portfolio as a means through which it can cross-sell other products.
"We're very comfortable with our mortgage growth. We've been growing faster than the market and that may continue for a little while longer," Chief Financial Officer Kevin Glass said in an interview after CIBC, Canada's fifth-biggest bank, reported better-than-expected third-quarter results.
Canada's bank index has retreated since the start of the year on concerns that the red-hot housing markets in Toronto and Vancouver could decline, exposing lenders to losses on loans that turn bad.
Top Canadian bankers back policies to cool the housing market to bring about a "soft landing," where prices stabilize gradually. Recent measures include taxes on foreign buyers, and the central bank has proposed tougher rules on mortgage lending.
"We are not at this point anticipating any sort of hard landing. I think there may be some moderation," said Glass.
CIBC has decided to ramp up its internal mortgage sales force instead of using outside brokers, he added, noting a bigger mortgage portfolio helps it sell other financial services to borrowers.
Canada's total residential mortgage market is worth about C$1.4 trillion.
Shares of CIBC, which has the biggest exposure to the domestic housing market among Canadian banks, fell 1.5 percent to $106.03. They are down 3.3 percent in 2017.
CIBC reported a 9 percent rise in net income, excluding one-off items, to C$1.17 billion, as a strong performance from its retail business offset a weaker showing at its capital markets division.
Earnings per share increased to C$2.77 from C$2.67 a year ago. Analysts had on average forecast an EPS of C$2.66, according to Thomson Reuters I/B/E/S data.
However, Barclays analyst John Aiken said the beat will "likely be viewed as low quality from investors" having been driven by increased revenues from its corporate business which will be difficult to repeat.
"We do not believe that the market will view this uptick as wholly sustainable," he said.
($1 = 1.2533 Canadian dollars) (Reporting by Matt Scuffham; Editing by David Goodman, Mark Potter and W Simon)