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Digesting CIBC’s Big U.S. Bite

Digesting CIBC's $3.8 billion bet on PrivateBancorp  via @bfly $CM $PVTB

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  • Investors should take comfort that the transaction, at a forward P/E multiple of around 18 and 2.2 times tangible book value, is cheaper than Royal Bank of Canadas $5.4 billion purchase of City National for $5.4 billion.
  • Source: Canaccord Genuity estimates, based on bank guidance
  • The number is expected to soar to 25 percent or more over time — and lead to higher profits overall.
  • Not only has the Canadian dollar weakened by 15 percent since Dodig stepped into the top job, but paying with a large chunk of stock allows the bank to maintain a key liquidity ratio known as Common Equity Tier 1, or CET 1, of more than 10 percent.

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@GillianTan: “Digesting CIBC’s $3.8 billion bet on PrivateBancorp via @bfly $CM $PVTB”

Its deal for PrivateBancorp, while not immediately accretive, will lead to faster growth in the long run.

Digesting CIBC’s Big U.S. Bite