CIBC in talks on $2 billion acquisition in U.S.
Chief executive officer Victor Dodig said CIBC, which has been eyeing the U.S. wealth management space for a while, must be patient as such companies don't come cheap. Such a deal by Canada's No. 5 lender would increase its scale and help ease concerns among some investors that the bank might be too exposed to the domestic Canadian market.
"It's a business we know, it's a business where the demographic trends are benefiting us and it's a business that has attractive economic characteristics," Dodig said ahead of the lender's annual meeting in Calgary, Alberta.
"I have several different conversations that are ongoing, where I get to understand the company," he added. "Some of them may well lead to a partnership."
Dodig led CIBC's wealth management unit before he took the bank's helm in 2014.
The U.S. wealth management industry is the world’s biggest and has been growing strongly as the number of millionaires rises and the U.S. job market recovers. But this has also driven up valuations.
"Valuations have gotten stretched in the U.S. market," Dodig said. "We don’t want to overpay on that front." ■