Butterfield shareholders greenlight CIBC Caribbean deal

The Bank of N T Butterfield & Son Limited, which trades as NTB, moved one step closer to acquiring majority control of CIBC Caribbean Bank Limited as its shareholders approved the issuance of new shares in connection with the US$1.8-billion deal. Butterfield shareholders approved all four resolutions on the agenda for its virtual annual general meeting (AGM) held on Friday, clearing the way for the Bermudan bank to move forward to the next stages of the transaction. Butterfield intends to raise US$700 million in tier two subordinated debt as it looks to further capitalise on the combined banking group.

Its previous disclosures noted that it had obtained commitments for this financing. The new capital raise is expected to bring Butterfield’s total capital ratio (TCR) to 19 per cent if the deal is approved. Butterfield’s TCR was 27.5 per cent as of June 30, well above the 10.5 per cent minimum requirement for Bermudan banks.

“Butterfield expects to raise up to approximately $700 million in the subordinated debt financing and has obtained underwriting commitments from two investment banks for up to such amount. The subordinated debt financing is expected to occur in the fourth quarter of 2026 or the first quarter of 2027, subject to market conditions,” stated Butterfield’s proxy statement. Thereafter, Butterfield will seek regulatory approvals or non-objections from several regulatory bodies across the Caribbean.

This includes Bermuda Monetary Authority (BMA), Cayman Islands Monetary Authority (CIMA), Central Bank of Barbados, Barbados Financial Services Commission and all other regulators in the jurisdictions where CIBC Caribbean has an operating subsidiary. These approvals are required since the ultimate beneficial controlling shareholder for CIBC Caribbean Bank is set to change for each of the operating subsidiaries. Both entities submitted all requisite regulatory filingss around July 15.

“Butterfield and the CIBC Parties believe that the transaction does not raise significant regulatory concerns and that they will be able to obtain all requisite regulatory approvals,” Butterfield’s proxy statement noted on the deal which is expected to close in the first half of 2027. If the deal passes all stages, Butterfield will become the sole shareholder of CIBC Investments (Cayman) Limited which owns 91.7 per cent of CIBC Caribbean Bank’s ordinary shares.