Canadian Imperial Bank of Commerce is joining a list of heavy hitters in syndicated lending by adopting Advanced Information Resources' commercial loan processing software.
The vendor's Advanced Commercial Banking System, which is going into CIBC Oppenheimer Corp. offices in the United States, is also used by three of the top five syndicated lenders-Chase Manhattan Corp., NationsBank Corp., and J.P. Morgan & Co.
"It was becoming the industry standard," said William J. Maron, executive director of CIBC Oppenheimer's client support center in Atlanta. "It seemed to have nearly everything we wanted."
The system lets lenders manage syndication memberships and related information. It captures data at the commercial loan, credit-and- arrangement, and customer levels, said Karl Thayer, Advanced Information managing consultant.
CIBC Oppenheimer, the Canadian bank's investment banking arm, is replacing a seven-year-old Midas-Kapiti International system, which was viewed as deficient in functions that included tracking unused credit commitments and handling multiple currencies, Mr. Maron said. Midas also had no syndication function.
The new system will let CIBC Oppenheimer better compete in syndicated lending, Mr. Maron said. The industry is becoming more focused on the use of capital and on originating, distributing, and trading loans. Banks are also getting more requests for information about customer bases and credit arrangements. The new system will help CIBC Oppenheimer handle these trends, Mr. Maron said.
With the new system, which runs on IBM's AS400 platform, CIBC Oppenheimer will integrate its syndications and loan operations businesses, Mr. Maron said. The software also has a good customer information file and holds a lot of data, he said.
Six CIBC Oppenheimer lending offices will have access to the system, which will be fully installed Nov. 1. Mr. Maron declined to specify the system's price but said he expects to recover costs in three to five years.
CIBC Oppenheimer is the 15th-largest arranger of loan syndicates, with $6.9 billion of syndications originated in 27 deals in the first quarter. Industrywide, syndicated lending hit $1.1 trillion last year, but the total is expected to decline in 1998 as some banks pull back from unprofitable investment-grade lending, said analyst Meredith Coffey of Loan Pricing Corp., New York.
The Advanced Information system is one of two leading applications designed to support syndicated lending, said Bill Bradway, research director at Meridien Research Inc. of Needham, Mass. The other is LS2, which was developed by International Business Machines Corp. and Bankers Trust Corp.
"Banks are becoming more dependent on computers because of the complexity of lending," Mr. Bradway said.