CIBC now seeking wealth management acquisitions of more than C$1 billion

Wed Sep 4, 2013 12:15pm EDT
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By Cameron French

TORONTO (Reuters) - Canadian Imperial Bank of Commerce (CM.TO: Quote) said it was seeking acquisitions valued at more than C$1 billion ($948.72 million) as it tries to boost the amount of profit it generates from wealth management.

"Much of the growth that we are planning will come from the U.S. and will be focused on asset management, private wealth management and private banking," Chief Executive Officer Gerry McCaughey said on Wednesday.

The bank is also targeting acquisitions in Canada, he told the Scotiabank financials summit in Toronto.

CIBC is focusing on wealth management because it offers steady fee-based income and requires very little capital to run, which is appealing under new global Basel III rules that force banks to hold more capital on their balance sheets.

The shift toward larger deals comes as CIBC plans to increase the percentage of overall profit it derives from its wealth management unit to more than 15 percent from the current level of 11 percent, McCaughey said.

"As we have worked through the universe of potential acquisitions, it has become clear that choices improve as we expand the size of the universe under consideration," he said.

"We are now open to considering acquisitions in excess of C$1 billion that would accelerate how fast we get to 15 percent."

CIBC, Canada's fifth-largest lender, is the least internationally focused of Canada's big five banks. It bills itself as the lowest-risk player of the group.   Continued...

A pedestrian walks past a CIBC branch in Montreal, February 25, 2010. REUTERS/Christinne Muschi