Banker John Hunkin steered CIBC through turbulent times
John Hunkin on the trading floor of Wood Gundy in Toronto on Nov. 25, 1997.Fred Lum*/The Globe and Mail
During John Hunkin’s six years as chief executive officer of the Canadian Imperial Bank of Commerce, he had many wins, such as buying the retail operations of Merrill Lynch, and one big loss: Enron Corp. The massive accounting fraud, the largest in U.S. history at the time, fooled many banks in Canada and the United States, but it ended up costing CIBC billions of dollars, and was probably the reason Mr. Hunkin retired in 2005 at age 60.
As CEO of one of the Big Five Canadian banks, Mr. Hunkin was one of the most powerful people in the world of Canadian business and finance. Adding to his influence was the fact he simultaneously served as chairman of CIBC’s board of directors for much of the time he was president and CEO, though he gave up the post of chairman in 2003 after a number of institutional investors lobbied him privately to make the move.
Mr. Hunkin started his professional life as a commercial banker, engaged in the traditional banking functions of running branches and lending money to individuals and businesses, and morphed into an investment banker, helping corporations raise money through bond and stock issues. The reason for the switch was that halfway through his career, the rules changed in Canada.
Until the mid-1980s, the financial world was divided into four parts, by law. The four pillars, as they were known, were banks, trust companies, insurance firms and investment dealers, what the public would call stockbrokers. These divisions changed when the big banks were allowed to buy brokerage firms.
As CEO of one of the Big Five Canadian banks, Mr. Hunkin was one of the most powerful people in the world of Canadian business and finance.Fred Lum/The Globe and Mail
Though the CIBC had a long relationship with Dominion Securities, it was bought by the Royal Bank and CIBC instead did a deal with Wood Gundy.
“Everyone ended up with a dancing partner,” said Ed King, who was vice-chairman of Wood Gundy before the merger, and chairman and CEO of Wood Gundy after it was bought by the bank. “The deal was accelerated by the October ‘87 crash, that saw the TSX [index] drop from 1,500 to 1,000 over the weekend.”
Mr. Hunkin subsequently made a quick transition from commercial banker to investment banker.
“John was an excellent relationship person and had good communications with bank clients, corporate and others,” Mr. King said. “John was a perfect fit for relationships and in the process, he became very active in the investment banking/corporate world. I think he managed that transition better than most.”
Mr. Hunkin’s understanding of the investment banking side of the business helped him when it came time for CIBC’s board of directors to pick a new CEO in 1999. He beat out Holger Kluge, the head of retail banking, for the top job.
“John Hunkin was an inspiring leader who dedicated his career to CIBC,” Victor Dodig, president and CEO of CIBC said following Mr. Hunkin’s death in Chester, N.S., on Jan. 6, at the age of 79. “He leaves a lasting legacy, including his many accomplishments over his 36-year career with our bank, and he will be remembered fondly by our CIBC Team.”
John Hunkin was born in Toronto on April 14, 1945. His father, Peter Hunkin, was born in England and at 18 was sent to Toronto by his parents who thought he would have a better life in Canada. Peter married Ethel Vallar, who managed their household, and they eventually had four children. He worked for the Canadian Bank of Commerce, which in 1961 merged into the Canadian Imperial Bank of Commerce, and he rose to become the bank’s head of human resources.
Though the Hunkins weren’t Catholic, they sent John and his brother, Peter, to the Catholic Michael Power High School, in Toronto, because they thought it would instill discipline. From there, John went to St. Francis Xavier University, a Catholic institution in Antigonish, N.S. But when his father was transferred to Winnipeg with the bank, John switched to finish his degree in economics at the University of Manitoba to be close to his family.
John Hunkin speaks at a press conference after CIBC’s annual meeting for shareholders at the Metro Toronto Convention Centre on Feb. 24, 2005.Louie Palu/The Globe and Mail
After getting an MBA at York University, Mr. Hunkin joined the CIBC in a Toronto bank branch in 1969, the start of a 36-year career with the bank. Although he started at the bottom, university-trained recruits were groomed for higher things.
He moved on to become an assistant manager at a branch in St. Catharines, Ont., and rose quickly, working for the bank in London, England, in the 1970s.
The Enron disaster for CIBC was complex. At first the CIBC agreed to an $80-million (U.S.) settlement with both the Justice Department and the U.S. Securities and Exchange Commission. However a class-action lawsuit followed, as Globe and Mail columnist Eric Reguly explained in May of 2006.
“Justice left behind a time bomb. The settlement prevented CIBC from disputing its unsavoury conduct in the Enron affair, meaning it could not defend itself against shareholder lawsuits. The bomb went off last August, when CIBC settled a class-action lawsuit for $2.4-billion, a price greater than the ones paid by Citigroup and J.P. Morgan for their Enron sins.”
At the time, the U.S. Justice Department said CIBC “has accepted responsibility for the criminal conduct of its employees in connection with a series of structured finance transactions with Enron.” It added: “As long as CIBC abides by the terms of the agreement, the Justice Department has agreed to not prosecute the bank.”
In an interview with The Globe’s Gorden Pitts in August of 2005, just after Mr. Hunkin left the bank, he mused about being the single top person in a big Canadian bank.
“I don’t think people understand how big the gap is between the top job and the next job. You are it, no matter what happens. When you win, it’s a team victory because you can’t get much done around here without a big team making it happen. And when it goes the other way, you alone own it – and that’s the way it should be. And if you don’t like that idea or don’t agree that’s the way it should be, you shouldn’t be in the job,” Mr. Hunkin said.
Mr. Hunkin started his professional life as a commercial banker.Patti Gower/The Globe and Mail
Mr. Hunkin was an open person with a self-deprecating sense of humour.
Mr. Reguly wrote a column titled “Hit the road Hunkin.” It had to do with the Enron debacle. Mr. Hunkin invited the journalist for an interview and Mr. Reguly asked if the chair in his office was where the U.S. attorney-general sat. “No, we built him an office down the hall,” Mr. Hunkin quipped.
When the bank executive retired, he and his wife, Susan Crocker, began to spend more time at their house in Chester, N.S., where they eventually moved full-time. He took up sailing in a 48-foot yacht named Katana. He was serious about the sport to the point of racing 361 nautical miles (668 kilometres) in the unpredictable North Atlantic from Marblehead, Mass., to Halifax. He and his crew finished first among the boats from Canada.
While he was the CEO of the bank he lent the power of his position to a number of causes. One of them was St. Michael’s Hospital in downtown Toronto.
“John joined the board of the foundation when he was CEO of the bank and he was instrumental in getting the largest gift to date, $25-million from [Hong Kong business magnate] Li Ka-shing,” said Tim Griffin who was chair of the board of the St. Michael’s Hospital Foundation. “John was tremendously entertaining, fun to work with and practical, straightforward and had a very down to earth approach. I think that was the key to his success everywhere he went.”
In his retirement he worked mostly for charities and non-profits.
“He had a very clear view about this, he made a decision to be engaged but in the not-for-profit sector because he felt he could have impact,” Ms. Crocker said. “He would commit to organizations like St. Mike’s and really commit, make connections and support them philanthropically. He never asked anyone to do anything that he wouldn’t do.”
Mr. Hunkin was also involved with the Centre for Addiction and Mental Health and the Schulich School of Business at his alma mater, York University. His work with those three organizations was cited when he was named a member of the Order of Canada in 2019.
In Nova Scotia he supported the QE2 Foundation of the Queen Elizabeth II Health Sciences Centre.
One of his hobbies was photography and he owned a number of 35mm and digital cameras. And he and his wife loved to travel.
“On our last trip we were biking in Switzerland,” Ms. Crocker said.
Mr. Hunkin leaves his wife, Ms. Crocker; his only surviving sibling, Barbara Cameron; his three daughters, Tara Hunkin Ayranto, Lauren Hunkin and Dawn Hunkin Bloomer, from his marriage to Barbara Becker which ended in divorce; and several grandchildren.
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