Canadian Imperial Bank of Commerce said it's cutting 900 jobs and reducing its executive ranks by 15 per cent after Canada's fifth-largest bank posted a full-year loss of $157-million.
The job cuts come as part of the bank's previously announced plan to cut annual costs by $250-million by the end of next year.
The bank said it will save more than $100-million from “reducing layers of management and overlapping accountabilities.” It already cut the number of its executive positions by 15 per cent. Broader restructuring, involving more than 900 additional positions, began in the fourth quarter and is expected to continue next year.
“Organizational changes that affect our people are always difficult,” said chief executive Gerry McCaughey. “However, these changes have been necessary to improve our overall competitiveness and to position CIBC for the long-term.”
In the fourth-quarter, profit climbed thanks to the sale of investments in Global Payments Inc. and Shoppers Drug Mart Corp. Net income applicable to common shares rose to $695-million or $2.06 a share, with the sales adding 72 cents to profit, from a year-earlier profit of $375-million or $1.06 a share.
As well, a reversal of general allowance for credit losses added 10 cents a share to CIBC's results.
For the full year, CIBC's loss applicable to common shareholders was $157-million or 46 cents a share, compared with a year-earlier profit of $1.99-billion or $5.53 a share. Results this year were stung by a $2.83-billion provision for Enron Corp.-related litigation.
In its outlook for next year, CIBC said it sees “another year of moderate growth” in both Canada and the U.S.
“Retail and wealth businesses in CIBC Retail Markets are expected to perform at levels consistent with the recent past and in line with industry growth rates,” the bank said. “In CIBC World Markets, through the actions we have taken to lower risk and volatility, we are well positioned to deliver more consistent results going forward.”
Among its divisions, CIBC retail markets' net income fell to $350-million in the fourth quarter from $393-million in the fourth quarter of 2004.
Net income at CIBC World Markets swung to a profit of $328-million in the fourth quarter from a loss of $34-million last year.
Profit at its corporate segment rose to $50-million from $43-million.
In separate releases, CIBC said it adopted a new policies regarding its corporate governance and pay structure. Its board also announced a new model for CEO compensation at the bank and said they've amended CIBC's director tenure policy.
CIBC is Canada's fifth-largest bank by market capitalization.
The bank's shares inched 1 cent higher to $75.20.
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