CIBC Raises Ceiling on Wealth Deals to $1.8 Billion

Canadian Imperial Bank of Commerce would consider spending as much as C$2 billion ($1.8 billion) on wealth-management takeovers, incoming Chief Executive Officer Victor Dodig said, setting a new ceiling for acquisitions by the country’s fifth-biggest bank.

“I would say that the right size for us at this point in time would be up to C$2 billion,” Dodig, who becomes CEO when Gerald McCaughey retires Sept. 15, said today at an investor conference in Toronto. “We’ve been quite clear in that we’re most interested in the wealth-management space.”

CIBC has said it seeks to boost earnings contribution from its wealth-management unit to 15 percent from 11 percent last year. McCaughey said a year ago that the Toronto-based bank was raising its target for acquisitions to more than C$1 billion to help reach that goal.

Dodig, 49, said he’s focusing on asset managers and private-wealth companies in the U.S., where CIBC has made previous acquisitions.

“It’s a market that we understand,” said Dodig, who currently heads wealth management. “What’s going to deliver consistent and sustainable earnings to our shareholder base? Those would be the asset-management and private-wealth sectors.”

CIBC bought Atlantic Trust Private Wealth Management from Invesco Ltd. for $210 million in January. The bank’s largest wealth-management deal was its August 2011 purchase of a 41 percent stake in American Century Investments for $848 million.

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net; David Scanlan at dscanlan@bloomberg.net Steven Crabill, Steve Dickson

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.