Upon completion of the transaction, CIBC would own 87.4% of FirstCaribbean.

The transaction is anticipated to take place at a share price of US$1.62, with a total transaction value of approximately US$1.08 billion.

FirstCaribbean, which is listed on the Barbados, Jamaica, Trinidad and Tobago and the Eastern Caribbean Stock Exchanges, is the largest regionally-listed bank in the English-speaking Caribbean, with assets of over US$9.6 billion and a market capitalization of over US$3.3 billion.

CIBC has had a long-standing presence in the Caribbean region, opening its first branch there in 1920. It acquired its current ownership stake in FirstCaribbean when its Caribbean operations were merged with those of Barclays to form FirstCaribbean in 2002.

Commenting on the deal, Gerry McCaughey, CIBC's President and Chief Executive Officer, noted that:

"With its established retail, wealth management, corporate and capital markets businesses, FirstCaribbean is an excellent fit for CIBC and is well-positioned for long-term success in a region that we believe has attractive growth prospects."

"We have enjoyed our partnership with Barclays in building a strong leader in the Caribbean financial services industry and we are committed to FirstCaribbean's strength and success."

Completion of the transaction, anticipated late in 2006, is subject to the completion of due diligence and the negotiation and execution of definitive documentation. The transaction would also be conditional upon regulatory approvals.

Under the terms of the LOI, CIBC will have the option of paying for the transaction through cash, CIBC common shares or a combination of cash and shares, the makeup of which CIBC will determine before closing.

Naguib Kheraj, Group Finance Director of Barclays PLC, observed: "FirstCaribbean has performed well since the local businesses of Barclays and CIBC were combined in 2002."

"The merger has created value for all shareholders in FirstCaribbean as well as benefits for customers and the regional economy. With the integration of the businesses complete, FirstCaribbean is now well positioned for its future development."

"Barclays and CIBC both believe that the future strategy of FirstCaribbean is best pursued with one controlling shareholder and we are pleased that we have reached this preliminary agreement."

FirstCaribbean has maintained an "A-Stable" rating by Standard & Poor's from FCIB's inception in 2002, the highest rating of any commercial bank in the Caribbean Community.

With 100 branches and banking centres, FCI has offices in 17 countries including: Anguilla, Antigua, The Bahamas, Barbados, Belize, The British Virgin Islands, The Cayman Islands, Curacao, Dominica, Grenada, Jamaica, St Kitts & Nevis, St Lucia, St Maarten, St Vincent and the Grenadines, Trinidad & Tobago and The Turks & Caicos Islands.