CIBC Chief Executive Officer Harry said Wednesday the bank has no appetite for a large merger or acquisition as it pivots toward organic growth, reiterating that the lender’s priority is deploying excess capital into loan demand improvements over 2027 and 2028.
Speaking at Scotiabank’s 27th Annual Financials Summit on September 9, Harry noted he has spent more than a decade on the bank’s executive team and has been CEO for 10 months. He pointed to CIBC’s strong capital position — CET1 ratio expected to stay in the 13% range near-term, with an estimated CAD 9 billion of capital above the regulatory floor — as evidence the bank can sustain its current trajectory without a major deal.
“There is no appetite for a large M&A transaction,” Harry said. “There is nothing on the radar. We are very focused on organic growth.”
The bank plans to pursue only “culture-fit, ROE-accretive tuck-in deals,” according to management.
CIBC reported a return on equity of 16.8% in the most recent quarter, with return on common equity over the trailing twelve months at 15%. CFO Rob Sedran set a committed target of 15% or higher going forward.
Efficiency gains are already visible. The efficiency ratio fell below 53%, and the bank has posted 12 consecutive quarters of positive year-over-year operating leverage. More than 15 large efficiency initiatives are underway, spanning the next three to five years.
Revenue in personal and business banking grew 9%, while pre-provision, pre-tax income advanced 10%. Net interest and other income climbed 17%. Mortgage lending accounts for less than 10% of personal and commercial earnings, management noted.
The bank’s U.S. operations contribute roughly 20% of total earnings, split evenly between its U.S. commercial and wealth platform and its U.S. capital markets division. CIBC acquired its private bank approximately nine years ago.
Harry also highlighted progress in the bank’s mass-affluent segment, describing the effort as being in its “third or fourth inning.” CIBC identified about 1 million core clients as potential candidates and fields 2,500 financial advisors plus 1,250 associate advisors. Its AdvisorAssist tool has lifted advisor productivity by 50%, he said.
A partnership with Costco has generated 3 million credit card accounts so far, with an additional 8 million potential clients identified through the relationship. Management described the initiative as ahead of plan.
Artificial intelligence is being deployed across risk management, client acquisition, fraud mitigation, productivity and revenue growth, the bank said.
CIBC shares closed at CAD 158.69 on September 9, down 1.53%. The stock has risen 30.9% year-to-date and 54.5% over the past year, with a P/E ratio of 15.3 and a PEG ratio of 0.58. The bank has increased its dividend for 15 consecutive years.
CIBC will hold its investor day on December 9.
