TORONTO — CIBC has disclosed an agreement to divest its 91.67 percent stake in CIBC Caribbean to the Bank of N.T. Butterfield & Son for a combined value of US$1.6 billion in cash and stock, coinciding with the announcement of its second-quarter profit increase compared to the previous year.
According to the CIBC Caribbean transaction, the bank stated on Thursday that it will obtain US$1 billion in cash along with 52.1 million Butterfield common shares, which will constitute approximately a 22 percent ownership in the firm.
This sale occurs as CIBC reported earnings of C$2.47 billion or C$2.53 per diluted share for the quarter ending April 30, rising from C$2.01 billion or C$2.04 per diluted share during the same period last year.
The revenue for the quarter was C$8.01 billion, an increase from C$7.02 billion in the same quarter last year, while the provision for credit losses remained at C$605 million, consistent with the previous year.
On an adjusted basis, CIBC reported earnings of C$2.54 per diluted share for the latest quarter, an increase from an adjusted profit of C$2.05 per diluted share in the same quarter last year.
Analysts had, on average, predicted an adjusted profit of C$2.44 per share, as per LSEG Data & Analytics.
“We achieved strong financial outcomes through the disciplined implementation of our client-centered strategy, which included double-digit growth in net income and an improved return on equity from a year prior, bolstered by excellent performances across all of our business sectors,” stated CIBC chief executive Harry Culham.
CIBC reported that its Canadian personal and business banking segment generated $846 million for the quarter, an increase from $734 million last year.
The bank’s Canadian commercial banking and wealth management division brought in $614 million, up from $549 million in the same quarter a year ago.
CIBC’s U.S. commercial banking and wealth management sector earned $260 million, an increase from $173 million last year.
The capital markets division of the bank reported earnings of $792 million, up from $566 million in the same quarter last year.
CIBC also revealed several executive appointments, including Susan Rimmer, who has been named senior executive vice-president and group head of commercial banking. Rimmer, who currently leads commercial banking in Canada, will also take on responsibilities for commercial banking in the U.S. and the office of the CEO.
Additionally, Eric Belanger has been designated as senior executive vice-president and group head of wealth management.
BNN Boomberg