Canadian Imperial Bank of Commerce CEO John Hunkin says he has lost patience with the earnings drag from the bank's Amicus electronic banking division and will take steps to narrow losses from the unit before the year-end.
CIBC's shares have lost more than a quarter of their value since the turn of the year, dragged down by losses at Amicus and exposure to telecomms. Amicus turned in a C$54 million loss in the last quarter.
Speaking at an analysts conference in Quebec, Hunt said: "We know that our shareholders have lost patience with the earnings drag and, considering the current environment, so have I."
He added that halving Amicus' losses would add between 30-35 cents a share to the bank's earnings and that steps would be taken to improve prospects for the unit by the year-end.
Amicus' US operations are most vulnerable to a cull. Hunt said that he expected the Canadian arm of the division to break even by the end of 2003.
Speaking at the same conference, BMO Nesbitt Burns CEO William Downe told the meeting that the Montreal-based bank will continue to strengthen its core Canadian business while building on its Harris franchise in the United States.
"Our industry has gone from one in which borders represented a tight defense against competitors, to one in which crossing borders has become a central element of corporate strategies," he said. "Market opportunities are not constrained by national boundaries and this is clearly evident in the North American market."
He added that the bank continues to pursue an opportunistic strategy of selective, substantial acquisitions in the US.