Canadian Imperial Bank of
Commerce (CIBC),
Canada’s fifth-largest bank by assets, has paid $150 million to
acquire a 22.5 percent stake
in Butterfield Bank, the largest independent lender in
Bermuda.

Butterfield has assets of $9.6 billion
and offers retail and corporate services in Barbados and the Cayman
Islands in addition to Bermuda.

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CIBC’s investment is part of a
$550-million recapitalisation of Butterfield with institutional
investors, including the Carlyle Group, investing the remaining
$400 million.

CIBC has also invested $26 million
indirectly in Butterfield through a private equity fund sponsored
by Carlyle.

News of the
Butterfield deal came within a few days of CIBC reporting strong
results for its first quarter: in the three months to 31 January
the bank reported profits of C$652 million ($629.7
million) compared with C$147 million for the same
period last year.

CIBC’s provision for credit losses of C$365
million was up from C$278 million a year ago, primarily due
to cards related delinquencies, as well as higher losses
at FirstCaribbean International Bank
and US-based property losses.

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CIBS Retail markets, which incorporates
personal, business banking and wealth management units, enjoyed a
resilient quarter posting revenues of C$2.4 billion, up 1 percent
from the first quarter last year. Net income at the unit, while
ahead of analyst forecasts, fell 8.3 percent to C$529 million (Q109
C$577 million).

The
bank’s net interest margin increased by 33 basis points to
1.76 percent while it reported a Tier 1 capital ratio of 13.0
percent (Q109: 9.8 percent).

Less positive was a 1 percent fall in total
deposits compared to the year-ago quarter, to C$224.2 billion.