UPDATE 2-CIBC profit drops less than expected as it eyes bigger deals
(Adds CEO comments on acquisitions, analyst's comment)
By Cameron French
TORONTO May 29 (Reuters) - Quarterly profit at Canadian Imperial Bank of Commerce fell by nearly two-thirds due to a charge taken by its Caribbean unit, the bank said on Thursday, but the result topped analysts' estimates and CIBC's chief executive signaled a willingness to pay more for acquisitions.
CEO Gerry McCaughey has targeted wealth management as a business he'd like to expand, and said last year he'd entertain deals in the billion-dollar range.
Speaking on a conference call on Thursday, McCaughey suggested he now might be willing to pay more.
"I'd be inclined to go bigger if we got something that was a strategic fit," he said, adding that CIBC, Canada's fifth largest bank, would likely issue equity to help cover any transaction in the billion-plus range.
He said he didn't want to put a limit on how much the bank would pay, but said its tolerance for equity dilution would be a consideration.
"For CIBC to do a transaction that was highly dilutive at the C$1 billion dollar level is quite different than CIBC doing a dilutive transaction at a C$2 billion level or a C$3 billion level, and I think that the constraints are the nature of the dilution," McCaughey said.
Appetite for Canadian bank shares has stayed solid, with the share prices of five of the country's top six banks hitting record highs over the past week, the exception being CIBC, which while up nearly 8 percent year-to-date, is still shy of of its levels before the 2008-09 financial crisis. Continued...