By Chaimae Chouiekh
(Bloomberg) — Canadian Imperial Bank of Commerce has inched past Bank of Nova Scotia in market capitalization to become Canada’s fourth-most valuable bank, as investor sentiment shifts in favour of lenders with more exposure to the domestic market.
CIBC has been the top-performing major Canadian bank over the past year, with its shares soaring 47%, giving it a market value of C$94.6 billion ($68.9 billion) as of Friday’s close. It hadn’t outranked Scotiabank since the early 2000s, until this month.
Scotiabank has been the worst performer of the group, with its shares rising 17% over the past 12 months. That’s largely due to underwhelming earnings as the bank executes a long-term strategy of trying to shrink the capital it allocates to Latin America.
“I think there’s been a decent culture shift now” at CIBC, said Dan Rohinton, a portfolio manager at iA Global Asset Management. “It’s been long enough and consistent enough that you can give them credit for the sustainability and durability of the work that they’ve put forward.”
With borrowing costs stabilizing and the Canadian housing market showing signs of resilience, investors have turned toward lenders with heavier exposure to domestic retail banking. CIBC has emerged as a relative safe haven amid global market volatility. The bank derived 63% of its earnings from Canadian personal, business and commercial banking and wealth management in the first six months of the fiscal year.
Investors and analysts have also pointed to improvements in CIBC’s technology, costs and productivity as factors that have allowed the bank to outperform peers.
Scotiabank is also pushing to win a bigger share of the Canadian market under CEO Scott Thomson, who took over the top job in 2023. But it’s still in the middle stages of a strategic overhaul that has seen the firm shift investments away from Latin America — where political instability and inflation have cut into profitability — and toward Canada, the US and Mexico.
“The fact that Scotia’s differentiating factor really was a focus on international and Latin America, with the region not performing very well over the last few years, has obviously negatively impacted investors’ view of their outlook,” Jefferies analyst John Aiken said in an interview.
After the most recent earnings report, RBC Capital Markets analyst Darko Mihelic wrote that Scotiabank’s international banking segment is still in “transition mode,” and the stock is trading at a low valuation in part because of struggles in growing its Canadian franchise.
A representative for Scotiabank declined to comment.
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Last modified: August 5, 2025