Elaborative SWOT Analysis of CIBC – A Leading North American Financial Institution

Quick Stats on CIBC

Founder	Henry Stark Howland
Year Founded	1961
Origin	Toronto, Ontario, Canada
No. of Employees	43,853
Company Type	Public
Market Cap	CA$ 53.524 Billion (2021)
Annual Revenue	CA$ 18.7 Billion (2020)
Net Income/ Profit	CA$ 3.8 Billion (2020)

 

Products & Services by CIBC 

CIBC has been in the banking industry for more than one and half-century and deals in

• Bank accounts
• Credit cards
• Mortgages
• Lending
• Investments
• Insurance

Competitors of CIBC

CIBC competes on a global level with many other banking service providers. The top 5 competitors of CIBC are

• Royal Bank of Canada
• Bank of Montreal 
• Power Corporation of Canada 
• Scotiabank 
• Toronto-Dominion Bank

Now since we learned about the bank, let us have a look at the SWOT Analysis of CIBC.

SWOT Analysis of CIBC

A SWOT analysis is an analysis that determines a company’s strengths, weaknesses, opportunities, and threats. It is a practical and true management practice that helps CIBC in determining its actual position in the market and that of its competitors. SWOT is an excellent way of understanding the company’s current position, where it falls short and where the company has chances of growing.

To better understand the SWOT analysis of CIBC, refer to the infographics below:

Below is a step-by-step detailed guide to help you with the SWOT analysis of CIBC.

Strengths of CIBC

The first internal factor is strength. A business firm’s unique services and strategies that distinguish the company from its competitors and attracts customers are referred to as strengths. Following are the strengths of CIBC:

• Wide Network: CIBC bank has a wide area of the network around the globe with its 1,100+ branches spread across 147 locations with international operations in the United States, United Kingdom, the Caribbean and Asia, and the United Kingdom; which serves more than eleven million clients.
• Best Workplace: CIBC has been awarded several awards for being one of the 50 Most engaged workplaces in North America and it is also recognized for leadership in mentor recruitment.
• Broad Range of Portfolio: One biggest strength that CIBC has is that it offers a wide range of products and services to its customers ranging from Canadian personal and business banking, Canadian commercial banking and wealth management, U.S. commercial banking and wealth management capital markets.
• Strong Corporate Social Responsibility: The company maintains its image by fulfilling its social responsibility by making corporate donations, partnerships and giving spirit to its employees via the One for Change employee giving and volunteering program.
• Network of Sponsorships: CIBC has done a good job in partnering with a lot of Canadian companies and events throughout the years which helped in generating funds and promoting the bank. Events like Petro-Canada, 2015 Pan American Games and 2015 Parapan American Games, CIBC is also a partner of the University of Waterloo Stratford Campus and Chicago Fire FC.

Weaknesses of CIBC

The second internal factor is weakness. Internal factors that hinder the growth and expansion of a business are called its weaknesses. A business needs to analyse its weaknesses to perform to its fullest. The weaknesses of CIBC are

• Cyber Security: As a wide range of transactions and services are done online, the use of CIBC’s online platforms is quite risky where it is difficult to track a fraud transaction or a cybercrime.
• Use of Digital in the Underdeveloped Area: Many rural or remote areas are not equipped with internet services so it becomes quite difficult to reach those areas to avail digital services. Also if people do have these service facilities with them, they are reluctant to use modern mediums of banking.
• Employee Overtime: CIBC customer service is poor because the employees of their customer service management feel that they aren’t treated well, in regards to lack of overtime pay. Wealth insurance is not given and they are expected to work for long hours.
• Internal Conflicts of Executives: CIBC has seen many conflicts of power between its executive which is well known for its publicized battles of succession to the top between Al Flood, Paul Cantor, John S. Hunkin and Holger Kluge which had resulted in the worst year of the bank in 2002.
• Depending on Canada & US: CIBC’s global presence is not up to the mark. The bank is dependent more on Canada & US. Also, CIBC lags behind the top Canadian banks in terms of international branches. 

Opportunities for CIBC

The first external factor is opportunities. Businesses need to analyse the external factors to use to their advantage to grow. The opportunities that CIBC has are as follows:

• Expansion of Business Through Online Mode: With the world moving ahead with technology developments, this is a great opportunity for CIBC too to reach a wider range of customers of modern generations that are adapting to technological advancements very quickly.
• Broadening the Geographic Reach: CIBC has been expanding its branches all over the world and it has enough resources to do the same in the future too, the bank is aware as it is planning the same. It acquired 92% of FirstCaribbean and named it CIBC FirstCaribbean International Bank. 
• Changing Consumer Behaviour: The consumer of today’s time is fully aware of what they want and what they don’t want. This helps the bank to adapt to the nature and needs of these consumers and grow more opportunities from them.
• Investing in Sustainable Development: With the growing need for environmentally friendly ways of survival and governments promoting such investments, sustainable finance has a bigger chance in the future and investing in sustainable finance is a profitable option. CIBC is planning to invest $300 billion in sustainable financing by 2030.
• Development of Technology: Since the FinTech industry is growing at a very rapid pace, there are advancements in technologies too. Using these kinds of technologies can increase efficiency and decrease cost.

Threats to CIBC

The second external factor that could jeopardize the entity’s success is threats. Businesses need to predict and analyse the future to understand the possible problems that may cause trouble for the business. The threats to CIBC are as follows:

• Employee Overtime: There is a case of making the employees work overtime in CIBC without paying them for the same which resulted in a $600 million class-action lawsuit against CIBC. Continuation of such incidents will affect the bank’s reputation a lot.
• Global Competitors: If CIBC wants to expand their business around the world, they have to be careful of what policies they make or how they provide their services in the foreign market or how they market themselves, where already existing local banks are what the people trust in. 
• Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages which are being sent by competitors. It clutters up the space, which leads to losing out on customers. CIBC is well versed and trying to adopt a variety of the latest digital marketing skills to get ahead of the competition. You must also check out these skills to achieve the same.
• Rising Controversies: CIBC has been in several controversies as in 2005 CIBC had misdirected faxes containing customers’ personal information. Such controversies can negatively affect the business of CIBC.
• Uncertain Conditions: The dynamic market environment makes it difficult not for a bank but for every company to be vigilant and to take precautions before any crisis occurs. One other example of an uncertain condition is the Covid pandemic which made most businesses go on a complete shutdown and only visioners were and can take advantage of such situations.

Now that we have come to the end of this thorough SWOT Analysis of CIBC. Let’s see the summation of this article in the conclusion.