Canadian Imperial Bank of Commerce

The Canadian Imperial Bank Of Commerce (CBIC) is one of the ‘Big Five’ chartered banks in Canada. The two Ontario- based banks namely the Canadian Bank of Commerce and the Imperial Bank of Canada merged in 1961 to give rise to the Canadian Imperial Bank of Commerce. It was the largest merger of two chartered banks in Canada’s history. Now CBIC is divided into three strategic divisions through which it conducts it’s business in Canada and abroad- retail and business banking, wealth management and capital markets. CIBC is a public company and its stocks are listed on the Toronto Stock Exchange and the New York Stock Exchange under the symbol CM. 

History of CBIC:

The Canadian Bank of Commerce which merged with the Imperial Bank of Canada to create CBIC was formed in 1867 by businessman and philanthropist William McMaster. By 1874 it had 24 branches. The second bank i.e. the Imperial Bank of Canada was formed in 1874 by a former vise- president of the Canadian Bank of Commerce Henry Stark Howland. The branches, depositors and the business loans of both the banks showed a rise with the rapid growth of Canada. By 1895, the Canadian Bank of Commerce had 58 branches whereas the Imperial Bank of Canada had grown to 18 branches. The integration of Canadian Bank of Commerce with other financial interests including Canada Life, Imperial Life, Central Canada Loan, and Savings, National Trust, A.E. Ames and Company and Dominion Securities under the leadership of the then president George Cox made it the leader in lending business at that time.

The impact of the First World War: 

The Canadian Bank of Commerce was largely affected by the First World War. President George Cox financed the expansion of the Canadian Northern Railway by issuing bonds. The war had negatively impacted the rail industry in Canada which increased the debt- load of the country’s railways. The Government of Canada nationalized the Canadian Northern Railway to form the Canadian National Railway. It buys out the shareholders including the bank to meet their debt obligations. During World War 1 the precursor of CIBC’s investment banking arm, Wood, Gundy, and Company took an active role in organizing the Victory Loans. 

During the Interwar years:

Post-war, with the industrial growth in Canada both the banks prospered. The Canadian Bank of Commerce continued growing by acquisition. Many acquisitions in the 1920s made the Commerce bank one of the strongest in Canada with over 700 local branches. The bank also opened international branches in Cuba, Jamaica, Barbados and more. On the other hand, the Imperial Bank of Canada was expanding its business on its own by opening its new branches. Therefore it remained a much smaller bank. 

In 1931, the Canadian Bank opened its new head office in Toronto. The 34-story building was the tallest in the British Commonwealth until 1962. 

In the mid of 20th Century: 

During the Second World War, both the banks namely the Canadian Bank of Commerce and the Imperial Bank of Canada financed the government by selling Victory Bonds to their customers. After the economy in Canada recovered both banks resumed growing. This growth, however, slowed down in the 1950s due to the increasing competition form the other financial institutions. 

The Imperial Bank merged with the smaller Barclays Bank of Canada in 1956 to counter this slow growth. To avoid the risk of a foreign takeover, the Imperial Bank merged with the Canadian Bank of Commerce to give rise to the second largest chartered bank in the Country- the Canadian Imperial Bank of Commerce. It had over 1200 branched across Canada. CIBC became a 10% investor in the Toronto Blue Jays baseball team in 1977.

In the Late 20th Century to Early 2000s: 

In 1988, CIBC bought a 65 percent stake in Wood Gundy, one of Canada’s oldest and largest stock brokerage firms. It formed the core of the bank’s capital market division. It also acquired the ownership of Merrill Lynch Canada and merged it into it’s Wood Gundy subsidiary in 1990 which made Wood Gundy the largest stock brokerage firm in Canada. 

CIBC introduced automated telephone banking in 1992 and also launched it’s a website in 1995. Thereafter it began to offer online banking services. CIBC was intended to merge with Toronto- Dominion Bank in 1988 but this merger was blocked by the Government of Canada as it was not in the best interest of Canadians. 

The bank began to expand it’s corporate financing activities, particularly in the US through its CIBC World Markets. In 2002 the bank considered merging with the Canadian insurance company Manulife Financial but the deal was not sealed as it was assumed that the Government will disapprove of the deal in the same way as that of the merger with the Toronto- Dominion Bank.

Current Operations of CBIC: 

In 2010, CBIC launched a mobile banking application and became the first chartered bank in Canada to do so. After a few months, the bank acquired Citigroup’s Canadian MasterCard credit card portfolio. After some months CBIC announced that it would introduce the internationally used Visa-branded debit card and become the first bank in Canada to do so. 

In 2014, CIBC acquired Atlantic Trust, the company’s wealth management unit. In 2016 CIBC announced its acquisition of Private Bancorp, a Chicago based commercial bank. This step enabled the bank to diversify its financial exposure and reduce it’s operating risks. 

In 2017 CIBC established Simplii Financial, an online banking service. In 2018, it announced the acquisition of Wellington Financial, a Toronto based venture capital lender. CIBC Innovation Banking provides not only financial help but also strategic advice to tech sector clients. 

In 2017, the Canadian Imperial Bank of Commerce announced that it would move it’s headquarters to the Bay Park Centre. The complex became CIBC Square under the terms of the lease. The international operations of CBIC are spread to the US, the Caribbean, Asia, and Europe. The company is ranked 172 on the list of Forbes Global 2000. It was named as the strongest bank in North America in 2012 and also the 3rd strongest bank in the world by the Bloomberg Markets.