Toronto-Dominion: Positioned As North America’s Bank

Summary

An overview of TD’s successful acquisition strategy in America and Canadian history.

Unlike any other bank, TD offers its shareholders exposure to the entire North American banking industry.

Credit Suisse has increased their target price for TD.

The Canadian banking industry is widely accepted to be one of the safest banking networks in the world. It is characterized into two general categories, which are the “large five” and the smaller second-tier banks. The large five include Royal Bank of Canada (NYSE:RY), Toronto-Dominion Bank (NYSE:TD), The Bank of Nova Scotia (NYSE:BNS), Bank of Montreal (NYSE:BMO) and Canadian Imperial Bank of Commerce (NYSE:CM). The second or smaller-tier banks include companies such as National Bank of Canada (OTCPK:NTIOF), Canadian Western Bank (OTCPK:CBWBF) and Laurentian Bank of Canada (OTCPK:LRCDF). Unlike the tier-two Canadian banks, the large five are much more than Canadian banks, and would be better described as international financial conglomerates with a strong rooted foundation in the Canadian banking industry.

The Canadian, banks supported by a historically strong Canadian dollar, increasing profits, cash-rich and with the desire to expand outside of Canada, have spent the last decade on a wild shopping spree. Let’s focus specifically on Toronto-Dominion Bank of Canada, which is commonly referred to as TD Bank or simply TD. TD has spent the last decade assisting the consolidation of the American banking industry, and has emerged as a household brand in America. This is significant to observe, as TD is neither positioned more as a Canadian bank or an American bank; it would be best classified as a North American Bank.

Today in Canada, TD is the second-largest bank by market capitalization and based on assets. It offers a range of financial services and products to greater than 10 million Canadian customers through more than 1,200 branches, and is armed with 2,600 Green Machine ABMs. The current-day TD Bank dates back to 2000, when TD acquired Canada Trust. In recent years, TD has been moving away from the Canada Trust brand to simply TD Bank. TD Bank is the brand name in the USA, which indicates a shift to consolidate brands throughout North America possibly towards one TD Bank, N.A.

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