Newspaper article The Canadian Press

CIBC Eyeing Acquisitions in U.S. Wealth Management, Private Banking

Newspaper article The Canadian Press

CIBC Eyeing Acquisitions in U.S. Wealth Management, Private Banking

Article excerpt

CIBC eyeing acquisitions in the U.S.


TORONTO - CIBC (TSX:CM) is eyeing acquisitions in the private banking and wealth management business south of the border, chief executive Victor Dodig said as the bank reported its fourth-quarter results.

"We're trying to look at companies that could fit our culture and will contribute not only to the strength of our culture, but also will contribute over the medium term to our bottom line," Dodig told a conference call with investors Thursday.

"That stuff takes time. And when the right time comes, we'll make those investments. But there's so much opportunity at home today that we need to focus on that element of our franchise, as well."

Dodig said the bank needs to ramp up the scale of its operations, particularly in private wealth management in the U.S., and would like to snatch up a company in the $1 billion to $2 billion range.

CIBC raised its quarterly dividend by three cents to $1.03 per share as it reported Thursday a fourth-quarter profit of $811 million, or $1.98 in diluted earnings per share, down from $825 million, or $2.02 per diluted share, in the same quarter a year ago.

However, its adjusted net income rose to $911 million, from $894 million a year earlier, while adjusted diluted earnings per share rose to $2.24 from $2.19 last year. Revenue for the quarter was $3.42 billion, up from $3.18 billion a year earlier.

Analysts had expected adjusted earnings of $2.25 per share and revenue of $3.4 billion.

Talk of making a deal in the U.S. by CIBC's new chief executive, who took over the top job in September, comes as the bank has been making tentative steps to move back into the U.S. market.

CIBC had scaled back in the U.S. after making several expensive missteps including a US$2.4-billion payment to settle an Enron lawsuit.

However, the bank acquired Atlantic Trust Private Wealth Management in the U.S. earlier this year in a bid to grow its wealth management business.

While emphasizing that the bank is not in any rush to make an acquisition, Dodig added that there a number of "interesting companies" that are particularly appealing and have some scarce and valuable traits.

"If the culture fits, if the math works, we would do those. …

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