CIBC London Makes Last New Hires In Five-Year Expansion Plan

With the recent hiring of two additional traders in its London office, Canadian Imperial Bank of Commerce's foreign exchange operation is now "fairly close to critical mass," three years into its five-year expansion plan, says European treasurer Roy Lambden.

Lambden, who was promoted to replace Michael Cornford on his unexpected move to Swiss Bank Corp. in January of this year (FX Week, January 11), has hired Jim Turnbull as a proprietary trader from Union Bank of Switzerland in Sydney and most recently, Graham Fowler, formerly assistant chief dealer at Royal Trust in London. "Fowler adds depth and experience to our Canadian dollar desk," says Lambden.

Since Lambden followed Cornford from Chemical Bank to CIBC in early 1991, the bank's London FX trading staff has more than quadrupled--from six dealers to 25. "We've had fairly steady growth over the last year," he says. "I believe in evolutionary and organic growth." Some in the market also say, however, that CIBC has lost some of the new traders it has hired. Lambden could not be reached again for comment by press time.

The expansion has been part of a five-year plan formulated three years ago to take CIBC from an obscure to a front-rank player in the foreign exchange and money markets, he says. Cornford, known as a gifted, if somewhat peripatetic trader in the market, was previously foreign exchange manager at Chemical Bank in London. He was brought on at CIBC in 1990 to lead the buildup, bringing with him several dealers from Chemical.

Last year, the entire treasury operation was put under the effective management of CIBC's investment banking subsidiary, Wood Gundy. The CIBC trading room is mostly occupied by Wood Gundy's capital markets, derivatives and securities traders, with whom the FX desk works in "close cooperation," says Lambden.

Lambden says that CIBC's expansion has been in both customer trading and in proprietary trading, which forms a large part of its strategy. "We have a portfolio approach, using a wide range of currencies and a wide range of trading techniques," he says. They include traders who look at fundamentals, and one trader using a "black-box" type trading module developed in-house, says Lambden.

CIBC may also grow its small FX options operation, he says. Chris Heasman, director of option applications at CIBC in New York, is conducting an options study (FX Week, September 6) "looking at how we manage FX and interest-rate options and how we can improve our management," says Lambden, who says that London may eventually have an options desk. Currently, CIBC only trades options from a 24-hour desk in Toronto, he says.

To support the overall expansion, the bank installed a new front- end deal-capture and risk-management system in London in August. The system, Varm 9000, was developed for the bank by deal-capture system guru Hal Hovland of 9000 Ltd. It will be rolled out in CIBC's New York and Singapore offices in the next few months, says Lambden. Varm may be eventually installed at the bank's head-office in Toronto as well, he says.

"The system will give us the capacity to do global limit checking--to tie the globe together," says Lambden. "It was a job to find a really flexible system to fit the dealing room of the 1990s." He says that the Varm system can handle a wide range of products, while giving spot dealers the speedy limit-checking and dealer-entry they need.

CIBC does already have a global management structure for its dealing rooms, which include two Asian desks, in Hong Kong and Tokyo, which are subordinate to the Singapore hub. Steve Bennett, who headed global money markets trading for CIBC before Cornford's departure, now directs FX and money markets for the bank--the two are entirely integrated at CIBC, says Lambden.

Bennett leads a management committee composed of himself, Lambden, New York FX and money-markets chief Peter Nielsen, Singapore FX and money- markets director David Lau, global FX sales chief Barry Wainstein, and two money markets managers from Toronto, says Lambden (FX Week, January 25).