CIBC sees proportion of profits from U.S. doubling in three years

Reuters

Published Dec 13, 2017 11:16AM ET

CIBC sees proportion of profits from U.S. doubling in three years

TORONTO (Reuters) - Canadian Imperial Bank of Commerce said on Wednesday it expected the proportion of its earnings coming from the United States to nearly double in the next three years, helped by the $5 billion acquisition of Chicago-based PrivateBancorp.

The bank acquired PrivateBancorp in June, closing a deal that analysts saw as transformational in enabling the bank to diversify outside of its domestic market, where there are concerns about a hard-landing for prices in the cooling Toronto and Vancouver housing markets.

CIBC told analysts during an investor update that it anticipated its U.S. business would contribute 17 percent of the bank's overall earnings by 2020 compared with 9 percent in 2017.

"That's a lot of hard work," said Chief Executive Victor Dodig. "We're going to focus on going deeper with our existing clients and bringing in new clients. The organic driver of growth is the most important driver we can focus on and the most sensible use of capital."

The bank is focusing its international strategy on the United States where it sees opportunities to drive growth. Reuters reported on Tuesday that CIBC planned to list its $2 billion Caribbean unit, FirstCaribbean, in New York, enabling it to exit a region where earnings growth has been slow.

CIBC said it expected overall earnings growth of 5 to 10 percent over the next three years and a return on equity of more than 15 percent. It also said it planned to pay out 40 to 50 percent of its earnings in dividends to shareholders.