TORONTO – Canadian Imperial Bank of Commerce plans to list its $2 billion Caribbean unit in New York, enabling it to exit a region in which it has been hampered by reputational risks and difficulties growing profits, three people familiar with the matter told this week.
Canada’s fifth-biggest lender, which will provide an update to investors on the bank’s growth strategy on Wednesday, no longer views the business as a core asset, the people said, declining to be named as the information is not public.
“FirstCaribbean is considering a potential stock market listing in the U.S., the world’s deepest capital market,” CIBC spokeswoman Caroline Van Hasselt confirmed, adding that no decisions have been made.
CIBC, which has been doing business in the Caribbean since the 1920s, could start by listing 20 percent of the business early next year and sell down further stake subsequently, two of the people said.
The bank has faced risks to its reputation by operating in the region following a bribery scandal involving FIFA, the world soccer governing body.
FirstCaribbean was caught up in the affair after an indictment announced by U.S. prosecutors in 2015 said an illegal payment was facilitated by a representative of the bank. FirstCaribbean said at the time it would take steps to ensure the bank is never used for illicit purposes.
Barbados-based CIBC FirstCaribbean International Bank has around 3,000 staff, over $12 billion in assets and a market value of $2 billion, according to the bank’s 2017 annual report.
CIBC FirstCaribbean said that it made net income of $142 million in the year to Oct. 31, 2017, compared with $143 million the year before.