Canadian Imperial Bank of Commerce wants to expand its wealth management business, particularly in the United States, rather than embark on a broader "transformational" acquisition, the bank's chief financial officer said Wednesday.
Kevin Glass told a financial services conference that the bank would like the sector's contribution to reach 15 per cent of overall earnings, up from the current level of 10 per cent achieved in 2012.
"We don't anticipate doing anything transformational from an acquisition point of view," he said.
"We don't think that that's what investors want or expect and that's not what we're looking at, but we do want to grow in a risk-controlled way and in certain areas that will mean making acquisitions."
He said the Toronto-based bank would be comfortable with a deal valued up to $800-million and looking to the U.S. makes sense because of the business culture and the many opportunities.
"It fits that strategic sweet spot more closely and there is also an enormous amount of opportunities. It's a very, very big market. There's a lot of stuff going on and it's definitely an area that we would continue to look at."
Mr. Glass also said the bank is making progress on restoring its Caribbean business to its historic level of profitability as it has seen an improvement in loan losses as it shifts from construction and hospitality sectors to more of a retail focus.
"To see the longer term big lift we'll need some economic help … but I think we're on the right track."
Earlier, the head of BMO Harris Bank said it continues to make progress with the integration of Milwaukee-based bank Marshall & Ilsley Corp. following its $4.1-billion takeover in 2011.
"We accomplished a great deal in the last 20 months but there is much more work ahead of us," said Mark Furlong, CEO of personal and commercial banking in the U.S.
He said Harris and M&I will benefit from a business recovery in the Midwest in the second half of the year.
Laurentian Bank of Canada chief executive Rejean Robitaille told the conference that the Quebec-based bank expects a "soft landing" in the Canadian real estate market rather than a dramatic downfall.
"We think we have a very sound portfolio and we do not expect a dramatic downside on the housing market side. We expect a soft landing, we expect maybe prices to go a little bit lower."
Mr. Robitaille said the bank has protected itself from risk by limiting financing of development projects to $30-million and requiring high levels of pre-sales and deposits.
He also said the bank consciously decided not to chase volumes by following competitors which recently offered very low mortgage rates of 2.99 per cent, similar to what it paid for five-year GICs.
"I don't have a Harvard degree," said Mr. Robitaille. "I'm just a humble chartered accountant, but you can't make a lot of money on this, but you can have lots of potential new volumes."