CIBC cuts jobs, shuffles executives in CEO cost-cutting mission
Canadian Imperial Bank of Commerce shuffled its top management ranks, cut jobs and took a restructuring charge as Chief Executive Victor Dodig works to control costs.
Canada’s fifth-largest lender by assets recorded a C$339 million (U.S. $255 million) charge in its fiscal first quarter to cover severance from staff reductions, as the pace of expense growth accelerated for its sixth straight quarter. CIBC also named new managers including the head of its largest division, Canadian personal and business banking, where the main product line, mortgages, lagged behind rivals in the past year.
The moves are part of Dodig’s efforts to reshape the Toronto-based bank while improving efficiencies. CIBC follows Bank of Montreal and Toronto-Dominion Bank in taking restructuring charges in recent quarters, as tighter margins, rising provisions and a more challenging operating environment damp revenue growth and spur Canadian lenders to cut costs to increase earnings.
CIBC’s restructuring charge, which totaled C$250 million after taxes, was primarily related to employee severance costs, according to a statement Wednesday. The bank didn’t disclose how many of its 45,083 full-time positions will be cut. The charge comes as noninterest expenses soared 11% to C$3.07 billion — the highest in more than 14 years — with the bank citing higher performance-based compensation and “continued investments to fuel future growth” for the jump.
Dodig’s expense push is showing some progress, with the bank’s adjusted efficiency ratio — a measure of what it costs to produce a dollar of revenue — dropping to 55% in the three months through Jan. 31 from 56% in the fourth quarter. In December, Dodig lowered his efficiency target to what he said was a more “realistic” range of 53.5% to 54% for 2022, from an earlier goal of 52%.
CIBC also reworked its management ranks, with Chief Risk Officer Laura Dottori-Attanasio becoming senior executive vice president of Canadian personal and business banking, the company’s largest division. She replaces Christina Kramer, who was named senior executive vice president of technology, infrastructure and innovation.
Shawn Beber was appointed chief risk officer, and Harry Culham, CIBC’s capital markets head, was given added responsibilities for the Caribbean, the bank’s CIBC Mellon custodial banking partnership and direct-to-consumer businesses including Simplii Financial.
The moves are effective March 2, CIBC said.