Transaction aligned with bank's strategic priority to grow business banking
TORONTO, April 30 /CNW/ - CIBC (CM: TSX;NYSE) announced today that it has acquired CIT Financial Ltd.'s ("CIT Canada") interest in CIT Business Credit Canada Inc. ("CIT Business Credit") to own 100 per cent of this company, which has been re-named CIBC Asset-Based Lending Inc. Financial terms were not disclosed.
CIT Business Credit was established in 2000 as a joint venture between CIBC and CIT Canada, a wholly-owned subsidiary of CIT Group Inc. CIT Business Credit combined CIBC's full range of commercial banking solutions with CIT's asset-based lending capability customized for the Canadian marketplace.
"This transaction is consistent with CIBC's priority to grow our business banking operations in Canada," said Sonia Baxendale, President, CIBC Retail Markets. "We are acquiring full control of an organization we know well following our long relationship with CIT. We are very familiar with the clients, the assets and the quality of the portfolio."
Asset-based financing offers clients customized loan arrangements secured by accounts receivable, inventories and fixed assets and can provide greater flexibility than lending based on cash flows.
"Asset-based lending is an expanding part of commercial lending in Canada as companies seek alternatives to traditional types of financing and we intend to devote the necessary resources to ensure CIBC Asset-Based Lending Inc. continues to grow and be successful," added Ms. Baxendale. "Through this transaction, CIBC will be in a stronger position to offer a broader suite of financing options for our existing and prospective clients."
This is the second acquisition announced by CIBC in the last two months. In March, CIBC said it had purchased a minority interest in Bermuda-based The Bank of N.T. Butterfield & Son Limited.
CIBC is a leading Canadian-based global financial institution. Through our two main operating groups, CIBC Retail Markets and Wholesale Banking, CIBC provides a full range of financial service products and services to almost 11 million individual, small business, commercial, corporate and institutional clients in Canada and around the world. CIBC is amongst the best capitalized banks in North America with a Tier 1 ratio of 13.0% at Jan. 31, 2010.
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