Adds analyst comments, market action in paragraphs 7-9

By Nivedita Balu

TORONTO, March 13 (Reuters) - CIBC CM.TO announced on Thursday that its CEO Victor Dodig would retire in October and be replaced by Harry Culham, the head of the Canadian bank's capital markets division.

Culham will serve as chief operating officer as of April 1 and take over as CEO on November 1, Canada's fifth-largest lender said.

As part of CIBC's executive shakeup in September, Culham took on additional responsibility to oversee the bank's global asset management business and enterprise strategy, along with CIBC's Caribbean business.

Culham will become CEO during a challenging time for big Canadian banks amid economic uncertainties due to the trade war between the U.S. and Canada.

"I understand risk quite well. (It is) one of my strengths ... We're not worried," Culham said in an interview with Reuters.

"We can control the controls, and we think we're good at that. We went through COVID, we've been through other ups and downs."

Culham joined CIBC in Vancouver as an intern, participating in its graduate programs. He held senior banking roles in Europe and Asia before rejoining CIBC in 2008. He became the head of the capital markets unit in 2015.

"We are surprised at the announcement as we thought (Dodig) might remain as CEO a couple of years longer," said Darko Mihelic, an analyst at RBC Capital Markets.

Mihelic said Culham brings "solid experience" in capital markets that will be beneficial to the bank even though his personal and commercial banking experience is relatively limited.

CIBC's shares were down about 1.2% on the Toronto Stock Exchange.

The big five Canadian banks recently raked in large profits from their wealth and capital market segments, which typically are fee-based and high-margin businesses, while expanding their businesses in the U.S.

CIBC has focused on growing its mass affluent and private wealth franchise in Canada and the U.S while building its digital footprint in Canada and growing its capital markets unit.

"I'm really focused on the bank overall ... I don't see the strategy changing," Culham said.

Dodig, who has been CEO for more than a decade, oversaw the expansion of CIBC's U.S. footprint. Under his leadership, it also added new clients in Canada through the purchase of Costco's COST.O Canadian credit card portfolio.

Its U.S. commercial lending book, however, faced challenges in 2023 due to higher exposure to the troubled U.S. office space than its peers, but it has taken steps to reduce the impact.

(Reporting by Nivedita Balu in Toronto; Editing by Chris Reese and Paul Simao)

((Nivedita.Balu@thomsonreuters.com; X: @niveditabalu;))