TORONTO — The heads of CIBC and Scotiabank kicked off this year’s round of shareholder meetings Tuesday by emphasizing their sound financial footing in the wake of several high-profile bank failures while also acknowledging they have more work to do.
“Our bank is a resilient institution,” said CIBC chief executive Victor Dodig. “We have strong capital levels and liquidity. We’re highly diversified across sectors and geography. And we have a long history of managing our business well through the full economic cycle.”
Scott Thomson, speaking at his first shareholder meeting as chief executive of Scotiabank, said the bank’s financial position similarly remains strong including with diversified sources of funding. He also noted the stability of the Canadian sector as a whole.
“We can all feel confident that the Canadian banking system is widely recognized for its lending and risk management practices, diligent government oversight and prudent regulation,” said Thomson.
The comments come after California-based Silicon Valley Bank failed in March after depositors rushed to pull out cash, causing a panic that also led to the downfall of New York-based Signature Bank and the collapse of Credit Suisse.
Speaking at the final Credit Suisse shareholder meeting Tuesday, chairman Axel Lehmann said the bank undergoing a run on assets and a forced sale to UBS is a situation that “no one could have anticipated.”
He cited rising interest rates, inflation and market volatility as contributing factors that were amplified by social media-driven fears of global contagion from the U.S. bank failures.
Canadian bank executives acknowledged the challenges to the global economy while focusing on their advantages and stability.
Dodig also emphasized the need to improve the prospects for immigrants, through more affordable housing and better skills matching, to ensure a sound economy.
“We must ensure that Canada retains its reputation as a welcoming nation of opportunity, so that we can compete successfully for the newcomers that we need to help grow our economy.”
Dodig also acknowledged the “pressure on profitability” CIBC had in the second half of last year, while Thomson said the bank had not delivered the returns shareholders should expect, with both banks promising to do better.
Scotiabank faced two shareholder proposals at its meeting, one trying to give shareholders a say on the bank’s overall environmental policy that garnered about 18 per cent support, while a second pushing for the bank to disclose more details on how it judges the climate plans of its high-emitting clients received about 25 per cent support.
CIBC had three shareholder proposals, including one pushing for the bank to publish the ratio of its median to executive pay that got about 10 per cent support, along with the same “say on environmental policy” vote that Scotiabank faced, which received some 17 per cent support.
The third resolution, calling for the bank to abandon its net zero emission targets and commit to funding the oil and gas industry, got less than one per cent of shareholder support.
Scotiabank’s slate of directors received over 95 per cent shareholder support while a say on executive pay vote returned about 91 per cent support.
CIBC said that a “substantial majority” of shareholders voted in favour of the directors, while 96 per cent voted in favour of the executive compensation package.
This report by The Canadian Press was first published April 4, 2023.
Companies in this story: (TSX:BNS; TSX:CM)
