CIBC, Barclays May Join Caribbean Units

Canadian Imperial Bank of Commerce and British banking group Barclays said they are in talks to combine their Caribbean operations in a joint venture called FirstCaribbean International Bank.

Barclays and CIBC, Canada’s third-largest bank by assets, would each hold about 45% of the bank, with the rest held publicly. Eventually, the 10% public stake would be raised to 20%.

The two banks gave no financial details but said the proposed deal would increase their capital base and assets and generate opportunities for revenue growth.

The joint-venture plan comes as Canadian banks await government guidelines on future mergers or alliances.

The government blocked merger plans in 1998 that would have seen four of Canada’s big five banks pair up. But a financial services reform bill was passed in June, clearing the way for banks and insurers to talk mergers and asset swaps.