CIBCFernando Morales/The Globe and Mail
Canadian Imperial Bank of Commerce expects consumer loans to drive most of its growth in the next few years, but the bank also wants to ramp up corporate lending by a significant amount.
Speaking one day after a management shakeup at CIBC, Richard Nesbitt, the bank's head of investment banking, told analysts that consumer lending is the primary driver of the bank's growth plans. However, he added that CIBC's No. 5 position in corporate lending among Canadian banks isn't good enough.
"We're the most Canadian-oriented bank. It makes sense that we lend to Canadian corporations," Mr. Nesbitt said on Tuesday. "Today we're quite a small lender and we need to be a bigger lender."
CIBC said last year that it intends to increase profit from consumer lending by more than 35 per cent by 2013, setting a goal of $3-billion. The bank made $2.2-billion in 2010.
Mr. Nesbitt was speaking at the National Bank Financial Conference in Montreal on the heels of executive changes at CIBC on Monday that saw him gain more responsibility within the bank, along with the sudden departure of Sonia Baxendale, its head of retail banking.
The bank did not give reasons for Ms. Baxendale's departure, but sources close to the situation said Mr. Nesbitt emerged as the leading internal candidate to take over when chief executive officer Gerry McCaughey retires. Though Mr. McCaughey, 55, does not plan to leave any time soon, the moves are seen as drawing clearer lines of succession within CIBC.
Mr. Nesbitt, also 55, said CIBC would continue to focus on its more conservative Canadian retail banking operations as it moves away from derivatives trading and riskier lending that resulted in past problems. He joined the bank three years ago as it was hit by a multibillion-dollar loss on U.S. mortgage securities. Mr. McCaughey's tenure as CEO has been marked by scaling back riskier operations inside the bank.
"We intend to be operated as a lower-risk bank," Mr. Nesbitt told analysts, echoing the CEO's previous statements. "We've spent the last several years, three years particularly, rebuilding our capital position and rebuilding our core business strengths."
Mr. Nesbitt said CIBC has a requirement that no more than 25 per cent of economic capital be used outside of retail banking. As the bank reduces exposure to structured credit products, Mr. Nesbitt said that will free up capital to be used elsewhere, including corporate lending in the wholesale banking division.
As part of the shakeup, CIBC handed responsibility for the bank's international operations to Mr. Nesbitt. CIBC has retail banking operations in the Caribbean, along with investment management business in Hong Kong and Singapore.
Also in the shuffle, chief financial officer David Williamson takes over CIBC's Canadian retail operations, while Kevin Glass, who joined CIBC in 2009, becomes CFO. Victor Dodig was named group head of wealth management.
Grant Robertson