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.
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