CIBC announced significant measures today to reduce costs and further mitigate credit risk in response to the ongoing deterioration of the North American economy and continued uncertainty following the events of September 11.

The bank increased its provision for credit losses in the fourth quarter by $100 million which, together with the $48 million provision increase related to a bulk loan sale, will bring the total fourth quarter provision to approximately $402 million.

The bank also announced a cost-cutting program that will result in a restructuring charge of approximately $180 million during the fourth quarter and the reduction of an estimated 2,000 positions.

CIBC says the job losses are the result of a business unit-by-unit analysis of market conditions and short- to mid-term growth prospects.

“Given the uncertain economic outlook, it is prudent to take pre-emptive action that reduces our costs, strengthens our balance sheet and helps to protect our earnings,” said John Hunkin, chairman and CEO. “We believe the steps we have taken will distinguish us in the face of the current market conditions and the prevailing uncertainty surrounding the economy.”

CIBC will announce its fourth quarter and year end results on November 26, 2001.

In a related move, CIBC announced that it has completed a bulk sale of U.S. corporate loans with a carrying value of nearly $848 million to Ark II LLC, an entity managed by Patriarch Partners II LLC., a New York- and Charlotte-based investment firm specializing in distressed loans. In addition, CIBC sold $195 million of undrawn credit commitments to Ark II.

The transaction will result in a specific loan loss provision in the fourth quarter of $48 million and a loss on sale of $157 million.