No dividend cuts as 'reliable income is incredibly important at this moment': CIBC CEO
The chief executive officer of Canadian Imperial Bank of Commerce says the bank has no plans to cut its dividend as a result of the COVID-19 pandemic.
“Our goal is to make sure that those dividends are flowing,” Victor Dodig told BNN Bloomberg’s Jon Erlichman in an interview Tuesday, noting the bank has never cut its payout to shareholders.
“The Canadian banking sector is incredibly well-capitalized. We’ve worked with the Bank of Canada, the department of finance, and our regulator to make sure that we have all the tools in place, to ensure that credit is moving to businesses.”
The Office of the Superintendent of Financial Institutions (OSFI) has told banks not to increase dividends or offer share buybacks during this period, which Dodig said is “completely understandable.” On Feb. 26, CIBC raised its quarterly dividend to $1.46 per share, effective with the payment on Apr. 28. As of late Tuesday morning, CIBC’s dividend yield was 7.17 per cent.
“I’d say one thing that’s incredibly important: the Canadian investors that invest in our banks rely on those dividends for income,” he added. “And every source of reliable income that we can provide to Canadians – and Americans, and our other shareholders that are investing in our banks – is incredibly important in this moment in time where cash flow reduces anxiety.”
Dodig said CIBC is solely focused right now on helping its clients and employees navigate through the financial turmoil brought on by the virus.
“We sense the anxiety that’s out there from our personal clients, our business clients, our corporate and commercial clients,” Dodig said. “And what we are doing is putting them front-and-centre and doing everything that we can possibly do in this very uniquely challenging time.”
“This is our moment of truth.”