HAMILTON, Bermuda, Thursday April 30, 2015, CMC – A Canadian bank which helped rescue Bermuda’s oldest and second largest bank five years ago is selling its ownership stake in the bank, officials have announced.
The Canadian Imperial Bank of Commerce (CIBC) pumped US$150 million into Butterfield Bank, which at the time was struggling due to the recession and toxic loans, but now it is set to fully divest itself of ownership in the bank.
“We saw this as a strategic investment five years ago and we are pleased that we are now able to monetise that investment for shareholders,” said Shawn Beber, CIBC’s senior vice-president, strategy and corporate development.
CIBC’s 103 million shares in Butterfield will be repurchased this week, with 80 million being bought back and cancelled by Butterfield, at a cost of US$120 million.
The remaining shares will be purchased by Carlyle Global Financial Services, which already has an approximate 19 per cent ownership share of Butterfield, whose overseas operations include a branch in the Cayman Islands.
Officials said the stock would be being repurchased on or before Thursday at a discount price of US$1.50 per share.
Butterfield’s common shares closed at US$1.97 on the Bermuda Stock Exchange on Monday, when the bank reported a first-quarter profit of US$26.8 million, up 15.8 per cent on the same period a year ago.
CIBC, Canada’s fifth largest bank, was part of an investment group that provided US$550 million of refinancing to Butterfield in 2010.
Butterfield chairman and chief executive officer Brendan McDonagh thanked CIBC for the confidence it had shown in the bank.