* Took on CEO job in 2005
* Refocused the bank as retail lender, reduced Wall St
* Announcement comes amid CEO shuffle at other Canadian
(Adds analyst comment, M&A context, shares)
By Cameron French
TORONTO, April 24 Canadian Imperial Bank of
Commerce said on Thursday that Chief Executive Gerry
McCaughey will retire in two years, the latest in a series of
leadership changes at Canada's top lenders.
Toronto-based CIBC,Canada's fifth-largest bank, said
McCaughey, 57, will step down on April 30, 2016. The bank did
not name a replacement, and said the actual date of McCaughey's
retirement could change upon the completion of a succession plan
that is currently under way.
McCaughey became CEO in 2005, when the bank was licking its
wounds from a series of disastrous investments during the
dot-com bust and dealing with the fallout of its ties to
collapsed energy trader Enron Corp. The bank ultimately agreed
to pay $2.4 billion to investors to settle a lawsuit accusing
the bank of helping Enron hide its debts before it collapsed in
McCaughey embarked on a plan to de-risk the bank, sharply
downsizing CIBC's once-mighty Wall Street presence, and shifting
its focus away from wholesale and investment banking and toward
domestic retail lending and wealth management.
McCaughey "made significant contributions to the bank,
leading the firm through the financial crisis, and returning
CIBC to consistent, sustainable, and profitable growth,"
Barclays Capital analyst John Aiken said in a note.
While CIBC is now the least internationally exposed of
Canada's top five banks, it has in recent years made some modest
acquisitions in the U.S. wealth management space, such as its
2011 purchase of 41 percent of Missouri-based American Century
Investments for C$848 million ($769.06 million).
Earlier this week Reuters reported the bank and two private
equity consortia are exploring offers for global asset
management Russell Investments.
CHANGING OF THE GUARD
The announcement extends a generational changing of the
guard at Canada's top five banks, which together dominate the
country's domestic banking sector.
Brian Porter replaced Rick Waugh as CEO of Bank of Nova
Scotia last fall, while Dave McKay will take the reins
of Royal Bank of Canada in August, replacing longtime
CEO Gord Nixon. Bharat Masrani will take on the top job at
Toronto-Dominion Bank in November, replacing Ed Clark.
RBC, TD, and Scotiabank are the country's top banks by
Unlike its rivals, who indicated likely successors well
ahead of their CEO retirement announcements, CIBC has not hinted
who might replace McCaughey.
The bank said last month that Richard Nesbitt, CIBC's chief
operating officer and group head of wholesale banking, would
retire in October. CIBC's other group heads are Victor Dodig,
who runs wealth management, and David Williamson, who runs the
bank's biggest division, retail and business banking.
Shareholders seemed unconcerned by the announcement, with
CIBC's stock trading up 20 Canadian cents at C$95.85 at
mid-afternoon, and Aiken said he expected minimal impact to the
"Although no immediate replacement has been announced, given
the long runway to Mr. McCaughey's retirement, we believe it
will be a smooth transition for his replacement," he said.
($1 = 1.1027 Canadian Dollars)
(Additional reporting by Euan Rocha; Editing by Andrea Ricci
and Chris Reese)