Posted On: Monday, June 26, 2017
by Bloomberg 23 Jun 2017
by Doug Alexander
Canadian Imperial Bank of Commerce will operate newly acquired PrivateBank under the CIBC banner rather than as a standalone entity, and the Chicago-based lender will ultimately be a platform for further U.S. expansion, Chief Executive Officer Victor Dodig said.
“When we come together, we’ll operate under a more unified brand," Dodig, 52, said in an interview at CIBC’s Toronto headquarters. “Over time, we’ll put all the right pieces together with respect to brand perspective, but the CIBC brand would be that lead brand."
CIBC on Friday completed its $5 billion acquisition of PrivateBancorp Inc., the holding company of PrivateBank. Larry Richman, who ran the Chicago lender for the past decade, becomes CIBC’s group head of the U.S. region and CEO of PrivateBank.
Canada’s fifth-largest lender by assets plans to start rebranding PrivateBank in the fourth quarter. The firm’s last U.S. acquisition, the January 2014 takeover of Atlantic Trust Private Wealth Management, was renamed CIBC Atlantic Trust Private Wealth Management in February. By comparison, Royal Bank of Canada has allowed City National Bank to operate independently since buying the California lender in 2015.
CIBC will spend the first two years focusing on internal growth at PrivateBank, though Dodig said he sees the potential for some “tuck-in wealth acquisitions.” After that, capital outlays or takeovers will be needed to reach longer-term goals of having the U.S. banking business contribute 25 percent of total earnings, he said.
“As opportunities are identified with the leadership team, we will look to make those investments," Dodig said. “But it’s got to make sense for our shareholders. There’s got to be a great cultural fit."
The PrivateBancorp takeover -- the largest in CIBC’s 150-year history -- gives the lender a commercial and private banking presence in Chicago and 11 additional U.S. markets. The firm, with $20.4 billion in assets as of March, serves mostly middle-market companies, business owners and wealthy families in the U.S. Midwest.