Canadian Imperial Bank of Commerce (CIBC)

• Date founded: 1961
• Industry: Banking, financial services
• Corporate headquarters: Toronto, Ontario, Canada
• Type: Public

Formed in 1961 by a merger between two of Canada’s oldest chartered banks, the Canadian Imperial Bank of Commerce is the smallest of Canada’s so-called “Big Five” financial institutions as measured by assets under management. Frequently referred to simply as CIBC, the Canadian Imperial Bank of Commerce is headquartered in CIBC Square in Toronto, Ontario, and in 2022, employed about 48,000 people to serve a worldwide customer base of approximately 14 million clients.

CIBC operates across four primary business units: personal and business banking, commercial banking and private wealth management, United States commercial banking and private wealth management, and capital markets. In the 2020s, CIBC maintained over 1,000 banking centers and a network of over 3,000 automated teller machines (ATMs). Most of CIBC’s retail banking operations occured in North America, but the company also maintained offices in Latin America, Europe, Asia, and Australia. CIBC’s stock trades on the Toronto Stock Exchange (TSE) in Canada and the New York Stock Exchange (NYSE) in the United States.

History

The Canadian Imperial Bank of Commerce traces its history back to 1867 and cites that year as the date of its founding. However, CIBC did not technically exist as a standalone entity until 1961. The oldest of its two predecessor institutions, the Canadian Bank of Commerce, was established in 1867 by the philanthropist and entrepreneur William McMaster. CIBC’s other component, the Imperial Bank of Canada, was launched in 1874 by former Canadian Bank of Commerce executive Henry Stark Howland.

Both the Canadian Bank of Commerce and the Imperial Bank of Canada benefited from the rapid economic development the nation enjoyed during the late nineteenth and early twentieth centuries. During this period, the Canadian Bank of Commerce installed finance magnate George A. Cox as its president. Cox aligned the bank with his extensive interests in lending, securities, and insurance. As a result, the Canadian Bank of Commerce established a position in commercial lending while expanding through a series of strategic mergers and acquisitions.

Meanwhile, the Imperial Bank of Canada focused on organic growth. While it steadily increased its nationwide presence, the firm remained relatively small compared to the Canadian Bank of Commerce. However, both institutions were authorized dealers of Victory Bonds during World War II (1939–1945), helping them maintain strong financial positioning as the Great Depression gave way to the postwar economic boom that swept North America.

In the late 1950s, the Imperial Bank of Canada became a potential target for foreign takeover, prompting its leadership to open merger negotiations with the Canadian Bank of Commerce. This merger was completed in 1961, with the combined entity being rebranded as CIBC. During the 1970s, CIBC weathered significant challenges created by an inflationary economic environment, which resulted in some of the bank’s major debtors defaulting on sizable commercial loans. However, CIBC reversed its fortunes in the 1980s thanks to changes in federal law that allowed banks to acquire ownership of securities trading brokerages. CIBC made moves into this newly opened domain and put together the largest assemblage of stock brokerages in Canada.

In 1998, two of Canada’s largest banks, the Royal Bank of Canada and the Bank of Montreal, announced plans to merge into a single megacorporation. Fearing competitive disadvantage, CIBC and the Toronto-Dominion Bank (TD) announced their own plans to join into a combined entity. However, both proposals required the approval of the federal government’s Minister of Finance, Paul Martin. Martin struck down both deals on the basis that they would not benefit Canadian consumers.

CIBC has since focused on internal growth, completing a series of brokerage, consumer credit, wealth management, and US expansions to maintain its position as one of North America’s largest financial institutions. In 2017, the bank established Simplii Financial, an online banking platform that earned the bank two million accounts. In 2018, CIBC acquired the venture capital lender Wellington Financial. However, in the early 2020s, a Canadian court ruled against the CICB in a class-action lawsuit brought by employees in 2007 who claimed the bank's overtime pay and off-time work policies violated their obligations to employees. The bank paid $153 million CAD in damages. In 2023, Canada's Financial Transactions and Reports Analysis Centre of Canada (Fintrac) fined the CIBC $1.3 million CAD for failing to comply with money laundering and terrorist financing rules. Fintrac claimed the bank did not file a suspicious transaction report despite having knowledge of a client's criminal activity, among other instances of poor reporting.

Impact

Due to its robust commercial lending activity, the Canadian Bank of Commerce played a major role in Canada’s economic development during its early years of nationhood. Under George Cox, the Canadian Bank of Commerce helped finance the construction of the Canadian Northern Railway. This railway eventually expanded into a nationwide transportation system spanning more than 10,000 miles (16,000 kilometers), which proved vital to the settling of Western Canada and the development of an agrarian economy on its prairies.

The Canadian Bank of Commerce also helped assuage a labor issue when it was one of the main institutions involved in a takeover of the British Empire Steel Corporation of Sydney, Nova Scotia, during the 1920s. The steel company had failed to make payments to major creditors, plunging the company and its employees into economic uncertainty. At the time, the bank takeover of the steel manufacturer was a major business story, demonstrating the potential for mutual benefit among workers and owners in an era defined by suspicion, distrust, and growing worker dissatisfaction.

When the Canadian Bank of Commerce merged with the Imperial Bank of Canada to form CIBC, the transaction was the largest merger of two chartered financial institutions in Canadian history. CIBC also had a profound impact on the Canadian professional sports landscape. The bank’s 10 percent ownership stake in the Toronto Blue Jays helped lure Major League Baseball (MLB) to Toronto in 1977. CIBC retained its ownership stake in the Blue Jays until 2000, by which time the club had memorably captured back-to-back World Series Championships in 1992 and 1993. In 2022, the company invested over $81 million in communities around the world, including programs, partnerships, and donations. These initiatives were designed to create access to opportunities and build more equitable and resilient communities.

Bibliography

Benchetrit, Jenna. "CIBC Will Pay $153m To Settle Overtime Class-Action Lawsuit From 2007." CBC News, 5 Jan. 2023, www.cbc.ca/news/business/cibc-settles-lawsuit-1.6704759. Accessed 10 Jan. 2025.

Bonham, Mark S. “Canadian Imperial Bank of Commerce (CIBC).” The Canadian Encyclopedia, 27 June 2024, www.thecanadianencyclopedia.ca/en/article/canadian-imperial-bank-of-commerce. Accessed 10 Jan. 2025.

“CIBC Quick Facts.” Canadian Imperial Bank of Commerce, www.cibc.com/en/about-cibc/corporate-profile/quick-facts.html. Accessed 10 Jan. 2025.

"Community Impact." Canadian Imperial Bank of Commerce, www.cibc.com/en/about-cibc/corporate-responsibility/community-and-sponsorship.html. Accessed 21 Jan. 2025.

“Corporate Profile.” Canadian Imperial Bank of Commerce, www.cibc.com/en/about-cibc/corporate-profile.html. Accessed 10 Jan. 2025.

Darroch, James L. Canadian Banks and Global Competitiveness. McGill-Queen’s UP, 1999.

“History.” Canadian Imperial Bank of Commerce, www.cibc.com/en/about-cibc/corporate-profile/history.html. Accessed 10 Jan. 2025.