Canadian Imperial Bank of Commerce Toronto, Canada: CIBC Holdco Inc. New York, New York

Federal Reserve Bulletin, October 2017 | Go to article overview

Canadian Imperial Bank of Commerce Toronto, Canada: CIBC Holdco Inc. New York, New York


Order Approving the Formation of a Bank Holding Company and the Acquisition of a Bank Holding Company

FRB Order No. 2017-15

(June 7, 2017)

Canadian Imperial Bank of Commerce ("CIBC"), Toronto, Canada, a foreign banking organization that has elected to be treated as a financial holding company within the meaning of the Bank Holding Company Act of 1956 ("BHC Act"), (1) and its subsidiary, CIBC Holdco Inc. ("CIBC Holdco," and together with CIBC, "Applicants"), New York, New York, have requested the Board's approval under section 3 of the BHC Act (2) to acquire PrivateBancorp, Inc. ("PrivateBancorp"), and thereby indirectly acquire The PrivateBank and Trust Company ("PrivateBank"), both of Chicago, Illinois. As part of the proposal, CIBC Holdco would become a bank holding company.

Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (81 Federal Register 60355 (September 1, 2016)). (3) The time for submitting comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act.

CIBC, with consolidated assets of approximately $381 billion, is the fifth largest insured depository organization in Canada. (4) CIBC provides retail and commercial banking, wealth management, insurance, and investment banking products and services, and it operates in North America (including the United States), Europe, and Asia. In the United States, CIBC also operates branches in New York and Illinois and representative offices in Texas and California. CIBC does not control a bank within the United States. (5)CIBC is a qualifying foreign banking organization and, upon consummation of the proposal, would continue to meet the requirements for a qualifying foreign banking organization under the Board's Regulation K. (6)

PrivateBancorp, with consolidated assets of approximately $20.1 billion, is the 82nd largest insured depository organization in the United States, controlling approximately $16.1 billion in deposits, which represent less than 1 percent of the total amount of deposits of insured depository institutions in the United States. (7) PrivateBancorp controls PrivateBank, which operates in Illinois, Michigan, Missouri, and Wisconsin.

On consummation of this proposal, CIBC's U.S. operations would have assets that represent less than 1 percent of the total assets of insured depository institutions in the United States. (8)

Competitive Considerations

Section 3 of the BHC Act prohibits the Board from approving a proposal that would result in a monopoly or would be in furtherance of an attempt to monopolize the business of banking in any relevant market. (9) The BHC Act also prohibits the Board from approving a proposal that would substantially lessen competition or tend to create a monopoly in any banking market, unless the Board finds that the anticompetitive effects of the proposal are clearly outweighed in the public interest by the probable effect of the proposal in meeting the convenience and needs of the community to be served. (10)

CIBC does not currently control a commercial bank in the United States, and CIBC and PrivateBancorp do not directly compete in any retail banking market. The Department of Justice has advised the Board that consummation of the proposal would not likely have a significantly adverse effect on competition in any relevant banking market. In addition, the appropriate banking agencies have been afforded an opportunity to comment and have not objected to the proposal.

Based on all of the facts of record, the Board concludes that consummation of the proposal would not have a significantly adverse effect on competition or on the concentration of resources in any relevant banking market. Accordingly, the Board determines that competitive considerations are consistent with approval.

Financial, Managerial, and Other Supervisory Considerations

In reviewing a proposal under section 3 of the BHC Act, the Board considers the financial and managerial resources and the future prospects of the institutions involved. …

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