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CIBC Raises Ceiling on Wealth Deals to $1.8 Billion

Sept. 3 (Bloomberg) -- 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

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