Standard & Poor’s today said Canadian Imperial Bank of Commerce’s announcement of its purchase of Merrill Lynch Canada Inc.’s retail brokerage operations would not affect the ratings or outlook on the bank.

S&P says this transaction is in keeping with CIBC’s strategy. The purchase is expected to be financed with preferred stock, which will largely offset the goodwill created with this transaction.

By Standard & Poor’s calculations for risk-adjusted assets, CIBC’s capitalization is in line with its Canadian peers. CIBC is expected to continue to generate tangible capital at a strong pace.

S&P says the outlook for the bank remains negative, as CIBC’s earnings are expected to be pressured by further deterioration in credit quality in a very difficult credit environment. Also, working against the bank are its level of exposure to capital markets and its dependence on market-related revenues.