In July 2025, Canadian Imperial Bank of Commerce (CIBC) surpassed Bank of Nova Scotia (Scotiabank) in market capitalization, becoming Canada’s fourth-most valuable bank, a position it hadn’t held since the early 2000s. CIBC’s shares surged 47% over the past year, reaching a market value of C$94.6 billion ($68.9 billion) as of July 2025, narrowly edging out Scotiabank’s C$93.01 billion. This shift was driven by investor preference for banks with strong domestic exposure, as CIBC benefited from a resilient Canadian housing market and stabilizing borrowing costs. Improvements in CIBC’s technology, cost management, and productivity, along with strong earnings growth (adjusted earnings of $2.18 billion in Q1 2025, up 23% year-over-year), fueled its outperformance. Notably, CIBC’s stock hit a record high of $101.22 on July 22, 2025, with a price-to-earnings (P/E) ratio of 11.7, significantly above its 10-year average of 9.4.
In contrast, Scotiabank’s shares rose only 17% over the same period, making it the weakest performer among Canada’s Big Five banks. Its struggles stem from a strategic overhaul under CEO Scott Thomson, who took over in 2023, aiming to reduce exposure to underperforming Latin American markets due to political instability and inflation. This shift has led to underwhelming earnings, with adjusted net income of $2.2 billion in Q1 2025, and a P/E ratio of 10.1, closer to its 10-year average of 9.7. Scotiabank’s international banking segment remains in “transition mode,” contributing to a lower valuation. However, analysts, including CIBC’s own Paul Holden, upgraded Scotiabank to an “outperformer” rating in September 2024, citing potential earnings growth from rate cuts and declining loan loss provisions.
CIBC’s dividend yield stands at 4.81%, lower than Scotiabank’s 6.37%, making Scotiabank more attractive for income-focused investors. However, CIBC’s stronger growth in capital markets and wealth management, along with its domestic focus, positions it favorably for investors betting on Canada’s economy. Scotiabank’s pivot toward North America, including a $2.8 billion investment in a 14.9% stake in KeyCorp, aims to bolster future profitability but introduces short-term risks. The choice between the two depends on investor priorities: CIBC for growth, Scotiabank for yield and potential recovery.