Until CIBC buys something else, the sale leaves the bank with less exposure to the U.S. market than before, raising questions as to why the bank pursued the American Century deal in the first place, Grauman said.
Royal Bank of Canada analyst Darko Mihelic reduced his adjusted earnings-per-share forecast for CIBC based on the sale, down 11 cents to C$9.50 for 2016 and 22 cents to C$10.18 for the following year. For CIBC to reach its 2018 wealth-management earnings target, “an acquisition is now possibly mandatory and possibly on the larger side,” Mihelic said in a note.
Buying the stake in American Century would be Nomura’s biggest overseas investment since it acquired Instinet Inc. for $1.2 billion in 2007. The Japanese firm is seeking to expand its capabilities to sell products to pension funds and insurers, and enter private banking and retail markets in the U.S., CEO Koji Nagai said in materials for an investor presentation on Dec. 1.