CIBC is selling its 41 per cent stake in American Century Investments for $1 billion US to Japan's Nomura banking group.
American Century is a Kansas City, Missouri based investment management firm with $149.3 billion US under management. The remaining stake is held by the Stowers Institute for Medical Research, which plows its dividends from ownership into biomedical research.
CIBC has held a 41 per cent stake in American Century since August 2011, when it bought it for $848 million US.
CIBC estimates it will realize a gain of $170 million US after taxes and the sale will add about 0.5 per cent to CIBC's Tier 1 equity.
This will help improve the capital buffer that the Office of Superintendent of Financial Instutitions requires a bank have in reserve to weather financial shocks.
"We have enjoyed a strong and mutually beneficial relationship with ACI, and our minority position in their business has proved to be a very good investment for our shareholders," CIBC CEO Victor Dodig said in a news release.
"Recognizing that a path to control was not going to be available over time, we made the decision to work with ACI to monetize our investment."
CIBC has taken a cautious strategy of buying wealth management and investment firms in the U.S. in the last five years, in an effort to diversify its holdings, which are mainly in Canada.
It was badly burned by U.S. expansion 10 years ago, after paying $2.4-billion to settle a lawsuit over its dealings with failed energy trader Enron Corp. It also suffered deep losses from subprime lending during the U.S. credit crisis.
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