CIBC Капитал Маркетс: өркендеу мен құлдырау тарихы

Investment banking subsidiary of the Canadian Imperial Bank of Commerce

In April 1995, CIBC Wood Gundy announced the acquisition of The Argosy Group, a New York based investment banking firm involved primarily in the high yield debt market. The acquisition of Argosy marked an aggressive push by CIBC into the US investment banking business. Prior to that point, CIBC had never done a junk bond deal. Argosy's three major principals had worked on some of the biggest junk bond deals of the 1980s while at Drexel Burnham Lambert. The 52 Argosy employees constituted the core of what would become CIBC's High Yield Group and CIBC Argosy Merchant Banking funds that were responsible for, among other things, the $1 billion windfalls that CIBC would earn from its early investments in Global Crossing. The Argosy principals also managed two collateralized debt obligation vehicles known as Caravelle Funds I and II. According to the deal, CIBC paid $350 million and additionally provided a $175 million that was paid in the course of over three years to help retain key executives from the firm.

By 1999, CIBC Oppenheimer changed its name to CIBC Capital Markets and positioned itself as CIBC's international investment bank. The CIBC Capital Markets unit suffered a net loss of C$186 million during the fourth quarter of fiscal 1998 which dragged down the performance of the parent bank's stock by almost one third. The loss in 1998 was due primarily to very rapid expansion into regions impacted by the various financial crises in 1998. As a result, CIBC Capital Markets refocused its efforts primarily on the U. S. and Canadian markets, despite the seemingly global ambitions implied in the unit's name. CIBC Capital Markets reached a peak in 1999 and 2000, when the investment bank cracked the top ten of U. S. issuers of high yield bonds and the top twenty in mergers and acquisitions advisory. In 1999, CIBC Capital Markets backed Gary Winnick and his company Global Crossing to build optical fiber cable connections under the ocean. In 2000, CIBC realized a gain of $2.0 billion from its relatively small equity investment in Global Crossing, representing more than 20% of the bank's profits. In June 2001, CIBC announced the construction of a new $800 million office tower at 300 Madison Avenue (At the corner of Madison Avenue and 42nd Street). The 35 story, building was originally expected to house up to 3,000 employees, bringing CIBC's entire New York staff under one roof. When the 300 Madison building was completed in 2004, CIBC's diminished workforce took up only a few floors, leasing the remainder to PriceWaterhouseCoopers.

In July 2001, The Wall Street Journal profiled CIBC Capital Markets, chronicling the rapid decline of the bank from the peaks of Wall Street's league table rankings. By 2002, CIBC was forced to set aside C$1.5 billion for bad corporate loans, primarily from CIBC Capital Markets and the bank was linked two of the most famous victims of the corporate accounting scandals of the early 2000s: Enron Corporation and Global Crossing. As a result of these developments, the parent bank implemented a strategy to reallocate resources away from the riskier CIBC Capital Markets division in favor of its retail operations. Also in September 2003, a jury found that CIBC had failed to provide complete financial information to investors in a high yield bond offering. Just a few months later, at the end of 2003, CIBC reached an $80 million settlement with the Securities and Exchange Commission over its various financings for Enron, representing far more than the bank had earned in fees. On February 29, 2008, CIBC Capital Markets Chairman and Chief Executive Officer Brian Shaw was replaced in both capacities by Richard Nesbitt, a former TSX Group CEO.

CIBC Capital Markets faces competition from major global investment banks such as Goldman Sachs, Morgan Stanley and the RBC Capital Markets, equivalent branches of other financial conglomerates such as BMO Capital Markets, and TD Securities, and other independent/boutique investment banks and large cap advisory firms such as the corporate finance practices of Deloitte and KPMG.