CIBC boosts mobile sales force after mortgages shrunk last year

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Canadian Imperial Bank of Commerce expects its growth in domestic mortgages to be more “market-like” in 2020, after last year’s contraction in home-loan balances, Chief Executive Officer Victor Dodig said.

CIBC is taking a more “diversified” approach to originating mortgages rather than focusing on the greater Toronto and Vancouver areas, once the source of CIBC’s outsized growth, Dodig said at a conference Tuesday. CIBC also increased its sales force of mobile mortgage advisers to 920 from 840 — still down from a height of 1,200 — and made efforts to “ignite” staff in branches who weren’t meeting expectations on mortgage sales, he said.

“All of that has delivered some pretty positive results in the months of November and December, that we believe will continue to deliver into the year,” Dodig said at the RBC Capital Markets banking conference in Toronto. “Our growth over the course of the year will look more market-like on the mortgage front.”

CIBC’s once-leading mortgage growth faltered last year following bank efforts to cool the pace, which led to three straight quarters of declining balances in home loans. CIBC’s Canadian mortgage balances were little changed at C$202 billion ($155 billion) in the fourth quarter from a year earlier.

The decline contributed to what Dodig described Tuesday as “some softness” in CIBC’s personal and small business division, which contributed to “a pause on earnings growth” in the last fiscal year. Dodig said he sees adjusted earnings growth in the “low-single-digit range” for 2020 as the company works back to its medium-term target range of 5% to 10% growth.

In terms of acquisitions, Dodig said CIBC isn’t looking to do anything “dramatic” in the U.S., though “tuck-in acquisitions” in wealth management are likely.

Bloomberg News
Originations CIBC Sales and marketing Canada Wealth management