CIBC bullish on Manitoba economy

JOE.BRYKSA / WINNIPEG FREE PRESS Enlarge Image

CIBC CEO Gerry McCaughey, left, and CFO David Williamson attend the bank's annual meeting in Winnipeg yesterday.

The Canadian Imperial Bank of Commerce held its annual general meeting in Winnipeg on Thursday using this province's stable economy as a backdrop to the bank's own careful approach to the market.

Gerry McCaughey told staff and shareholders at the Fairmont Hotel he's confident results are improving at the bank's troubled wholesale division, which serves business clients.

Enlarge Image

Jasmine Thomas protests outside the meeting over the bank’s backing for an Enbridge pipeline between Alberta and British Columbia. (JOE BRYKSA/ WINNIPEG FREE PRESS)

He said positive signs have been emerging for the segment of its business that serves large corporate clients, mid-sized companies, real estate developers and investors with various financial services.

"As the environment continues to improve and our pipeline has become active, we continue to win major assignments across industries of strategic importance to CIBC," he said.

The fifth-largest bank in the country is also probably its most Canadian-focused, with only a modest retail presence outside Canada in the Caribbean.

It plans to seek further growth in Canada by deepening its service offerings within its risk appetite.

"Moving forward," McCaughey said, "our wholesale business is focused on maintaining its leadership position in key activities such as mergers and acquisitions, corporate lending, equity trading and debt capital markets."

McCaughey said in an interview that when it comes to the bank's expectations on the consumer spending front, he sees some headwinds on the horizon from rising gas prices.

"It is probable that we will see some indications of that (rising gas prices) throughout North America in consumer spending that will be a headwind for the recovery," he said.

As for Manitoba, McCaughey is bullish on the underpinning strength of the economy here.

"I have to say with all the volatility we have seen in recent times throughout the developed world, there are an enormous number of jurisdictions that would covet such consistency and sustainability," he said.

Born in Winnipeg, McCaughey, 55, grew up in River Heights, went to Montreal to university and returned to Winnipeg years later in a posting with the bank.

McCaughey would probably like to see more stability in the wholesale banking division, one that has been of particular stress to CIBC in recent quarters as the bank booked eroding profits in the division, while most other Canadian banks saw stronger profits from the economic recovery.

During the first quarter, CIBC posted wholesale banking profits of $136 million, down from $184 million a year earlier. In the fourth quarter, the division posted a $56-million loss.

McCaughey said the bank is working to boost wholesale banking results in the coming quarters with broader client relationships, an expanded array of corporate lending products and "ensuring we have an appropriate presence in key international markets to service our Canadian clients."

A small group of protesters representing five First Nations of the Yinka Dene Alliance in central British Columbia greeted the people attending the meeting outside the hotel.

They were protesting the bank's financing of Enbridge Inc. to support its proposed Northern Gateway pipeline from the tar sands of Alberta through central B.C. to Kitimat.

Jasmine Thomas, a representative of the group, said the pipeline will cross 1,000 salmon-bearing streams, crucial to the lifestyle of the indigenous people there. She raised concern about the threat a dramatic increase of oil tanker traffic could pose to the region.

CIBC officials agreed to meet Thomas, who addressed the CIBC meeting, saying, "We would like CIBC to adopt a policy that would require the bank to consider whether its clients have obtained the free, prior and informed consent of affected indigenous peoples, and not to assist in financing companies that do not obtain indigenous consent for their projects."

martin.cash@freepress.mb.ca

-- With files from The Canadian Press

CIBC in Manitoba

1881 -- the bank's first branch outside Ontario was opened in Winnipeg

47 -- number of branches in Manitoba (including 50 automated banking machines in Winnipeg)

1,000 -- number of CIBC employees in Manitoba.

Republished from the Winnipeg Free Press print edition April 29, 2011 B4