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Posts Tagged ‘cibc “bank merger” takeover

CIBC a takeover candidate? | Dundee Securities

I have been waiting for mention of one of the Canadian Banks and merger/ takeover prospects, in the context of capital adequacy. This in light of never ending announcements of new sets of losses, some tied to subprime, and some tied to bad decision making and market speculation. Those losses have grown consequently since that 2007 post.

CIBC a takeover candidate? – FP Trading Desk

The possibility of more writedowns at CIBC could force the bank into another’s hands, says John Aiken, analyst at Dundee Securities.

Following on the heels of the U.S. Federal Reserve’s Fannie Mae and Freddie Mac intervention and the U.S. bank failure of IndyMac, Mr. Aiken said CIBC may be forced to raise common equity once again as a result of continued write-downs on its credit and liquidity exposure.

Mr. Aiken said CIBC is safe for now from needing to raise additional capital, noting it can withstand pre-tax charges of up to $2.5-billion. But with potential charges of roughly $4-billion to come, he believes CIBC would need more capital before all is said and done.

That won’t be an easy task, he added, and could leave CIBC with possibly no other option than to be taken over by another bank.

Written by Colin Henderson

July 15, 2008 at 13:25

Posted in Canada

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