CIBC announced today its intention to close, or at least substantially reduce, its U.S. electronic banking business. The bank alsoannounced it will be eliminating as many as 710 positions within its CIBC World Markets and Wealth Management businesses.

The closure of the electronic banking business would result in a restructuring charge of up to Cdn. $240 million, after taxes, in the fourth quarter of 2002. Operating losses from the businesses should then be substantially lower in the first quarter of 2003 and CIBC hopes that losses will become negligible in the coming year. CIBC’s electronic banking operations in Canada, such as President’s Choice Financial, continue to perform well and are not affected by the U.S. electronic banking restructuring. CIBC continues to expect the President’s Choice Financial business to be profitable by the fourth quarter of 2003.

CIBC also announced today its intention to reduce staff levels at CIBC World Markets and CIBC Wealth Management. The reductions will result in approximately 240 job losses at World Markets and approximately 470 losses at Wealth management. The eliminations will occur primarily in the United States and are the result of continued low levels of business activity, particularly in investment banking.
This will result in a pre-tax charge of approximately $80 million to be incurred in the fourth quarter of 2002.

CIBC’s retail banking and other areas will undergo network optimization and efficiency measures, and operations support for retail banking and other areas will be consolidated. This will result in a fourth quarter pre-tax charge of approximately $70 million.

The bank provided an update on its ongoing review of loan, merchant banking and other securities portfolios. A final review is conducted at the conclusion of each quarter, while the update below consists of estimates only of fourth quarter results:

> CIBC expects to incur losses on its loan portfolio of approximately $280 million, bringing loan losses for fiscal 2002 to approximately $1.5 billion.

> CIBC expects to incur losses in its Merchant Banking portfolio of approximately $200 million, as write-downs will exceed revenues from divestitures and investment returns.

> Write-downs to CIBC’s Collateralized Debt Obligation and High Yield Debt portfolios are expected to reach approximately $160 million.

CIBC also said it expects to be able to provide more definitive information when it releases its fourth quarter financial results on November 27, 2002.