The Bermuda bank agrees to buy a 91.7% stake in CIBC Caribbean Bank for $1.8 billion, creating a regional giant.
This article appears in the July/August issue of Global Finance Magazine.
Butterfield Group has agreed to acquire a 91.7% stake in CIBC Caribbean Bank Limited for $1.8 billion — $1.09 billion in cash and the remainder in shares — in a deal that would create one of the region’s largest banking groups.
This is at least the third time in the past seven years that the Canadian Imperial Bank of Commerce (CIBC) has attempted to sell some of its Caribbean interests.
“This deal combines two storied, complementary banks with significant local scale advantages and time-honored customer relationships in their respective core jurisdictions,” said Michael Collins, Butterfield’s chairman and chief executive, in a statement.
The new banking group will hold an estimated $29 billion in assets. The Bermuda-based Butterfield Group—formerly The Bank of N.T. Butterfield & Son Limited—also operates in The Bahamas, the Cayman Islands, the Channel Islands, Singapore, Switzerland, and the U.K. CIBC has a presence in 10 countries and is based in Barbados.
CIBC will hold about 22% of the enlarged Butterfield Group and will have the right to appoint two directors to the board.
The bank’s top brass says the deal underscores a shift in the Caribbean financial sector.
“This is really a change in Butterfield’s positioning because it now picks up both a retail and a business portfolio that spans the entire gamut of the region, and it probably could make it the biggest bank in the region,” former Butterfield CEO Mariano Browne told the Trinidad and Tobago Guardian.
Butterfield has promised to maintain CIBC’s Barbados office. Customers should expect no immediate changes. Existing branches will remain open, and clients can expect improved cross-border payments and expanded consumer, digital, and merchant banking.
The deal, pending regulatory approval, should close in the first half of 2027.
In 2018, CIBC attempted to list FirstCaribbean on U.S. stock markets to raise up to $240 million but withdrew the application less than a month later after failing to drum up sufficient investor interest. A 2019 deal to sell 66.7% of CIBC to GNB Financial Group for $797 million fell through after the deal failed to secure regulatory approval.
Nic Wirtz is a contributing writer based in Guatemala.