UPDATE 1-CIBC's Baxendale leaves in management shakeup

Mon Mar 28, 2011 1:06pm EDT

* Unexpected departure removes possible CEO successor

* Replaced by former CFO David Williamson

* Wholesale bank head Nesbitt gets added responsibility

TORONTO, March 28 (Reuters) - Sonia Baxendale, the head of retail banking at Canadian Imperial Bank of Commerce (CM.TO), who was seen as a prime candidate to succeed as CEO, is leaving the bank, Canada's No. 5 lender said on Monday.

The announcement by CIBC was part of a shake-up in the executive suite, which now leaves wholesale banking head Richard Nesbitt as the most obvious successor for the top job.

Baxendale, who was responsible for overseeing CIBC's flagship Canadian personal and commercial banking operation, will be replaced by David Williamson. Williamson had previously been serving as chief financial officer.

Kevin Glass will take over as CFO.

As head of the bank's main revenue generator, Baxendale had been seen as one of the likely successors to Chief Executive Gerry McCaughey, who became CEO in 2005.

Since taking over, McCaughey has put the emphasis on CIBC's domestic retail banking, following a series of loss-producing investment bank missteps in the early part of the decade.

"It's a bit of a surprise," Barclays Capital analyst John Aiken said of Baxendale's departure.

The bank did not give a reason for her exit.

Richard Nesbitt, who joined CIBC as head of its investment banking operation in 2008, will now take on additional responsibility for corporate strategy, and oversee the bank's international operations, which include Barbados-based FirstCaribbean Bank.

"In terms of succession planning, it was always a pretty tough call to see who was going to succeed McCaughey. But right now it looks like it would probably be Nesbitt," said Aiken.

CIBC also separated its wealth management business from its retail banking operation, following the lead of Bank of Nova Scotia (BNS.TO), which made that change last fall.

Victor Dodig will take over as head of the bank's wealth management division.

($1=$0.98 Canadian) (Reporting by Cameron French; editing by Rob Wilson)

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