TORONTO (Reuters) - Canadian Imperial Bank of Commerce (CM.TO) has named wealth management head Victor Dodig as its next president and chief executive, replacing Gerry McCaughey who will retire in September.
The changing of the guard at Canada’s fifth-largest bank announced on Thursday follows recent succession moves at larger rivals Royal Bank of Canada (RY.TO), Toronto-Dominion Bank (TD.TO) and Bank of Nova Scotia (BNS.TO), as the generation that took the reins of the country’s lenders in the early-to-mid 2000s makes way for new blood.
Dodig, 49, joined CIBC in 2005 and has been group head of wealth management since 2011. Before that, he was an executive at UBS Global Asset Management. Dodig has “demonstrated his ability to complement CIBC’s organic growth plan with acquisitions and investments that align to the bank’s risk profile,” CIBC Chairman Charles Sirois said in a statement. McCaughey, 58, said earlier this year he planned to retire by April 2016, but noted that the actual date would be finalized after a new CEO was selected.
Dodig and CIBC retail banking head David Williamson were seen as the most likely internal candidates for the CEO job.
But the fact that the bank announced McCaughey’s departure before naming a successor suggested that others were being considered, said Tom Lewandowski, an analyst at Edward Jones in St. Louis. “The thought here was that it as going to come from outside.”
McCaughey became CEO in 2005, when the bank was licking its wounds from a series of disastrous investments during the dot-com bust and dealing with the fallout of its ties to collapsed energy trader Enron Corp.
He embarked on a plan to reduce the bank’s risks, sharply downsizing CIBC’s Wall Street presence, and shifting away from wholesale and investment banking toward domestic retail lending and wealth management.
CIBC is the most domestically focused of Canada’s five biggest banks, with modest aspirations to expand its wealth management business in the United States.
Lewandowski said Dodig’s promotion suggests the bank does not plan to deviate from its current strategy. “Generally, it’s going to be less of an event if it’s an internal candidate,” he said.
CIBC is the fourth big Canadian bank in the past year to move to replace its CEO.
Brian Porter succeeded Rick Waugh as CEO of Scotiabank last fall, while Dave McKay will take the reins of RBC in August, replacing longtime CEO Gord Nixon. Bharat Masrani will take on the top job at TD in November, replacing Ed Clark.
Canada’s banks escaped the financial crisis with relatively little damage, and have been named the world’s soundest for six straight years by the World Economic Forum.
Reporting by Cameron French; Editing by Richard Chang