Toronto-Dominion Bank, Canada's second-largest lender, is targeting wholesale banking in the U.S. after spending nine years building a network of retail branches from Maine to Florida.
"We're very optimistic about the opportunities going forward there," Patrick Meneley, vice-chairman of investment banking at Toronto-Dominion's TD Securities unit, said in an interview. "Primarily our focus is going to be mid-tier" companies.
Toronto-Dominion offers corporate services in the U.S. such as cash management, bank accounts and foreign exchange to clients that aren't "necessarily Fortune 500" firms, Meneley said in a December interview. About 10 percent of TD Securities's C$2.49 billion ($2.51 billion) revenue in 2011 came from the U.S., according to an April 2012 presentation by the firm, with 76 percent coming from Canada and 14 percent from Asia and Europe.
"What we're really focused on is being a partner of choice to our target clients," said Meneley, who has been with TD Securities since 1997. "We deliver our balance sheets and become part of their banking group."
Canadian firms find it difficult to compete with the full- service, "bulge bracket' investment banks in the U.S., said John Aiken, an analyst at Barclays Plc in Toronto. "They will be more of a boutique, and probably within select industries that TD has a specialization in."
Toronto-Dominion has spent more than $25 billion since 2004 building a U.S. consumer bank branch network. Known south of the Canadian border as TD Bank, America's Most Convenient Bank, the firm advertises better customer service and longer hours than its competition.
"People are saying 'If you can deliver that kind of legendary service in retail, then we can also move our business accounts over and do banking with you'," Meneley said.
While TD Securities has about 550 U.S. employees, investment-banking services will also be sold in 1,315 TD Bank locations. In addition to wholesale products, they also sell services from TD Ameritrade Holding Corp., the brokerage in which Toronto-Dominion has about a 45 percent stake.
"If you're there as a retail customer and like their service, you're obviously going to be swayed to at least think about moving your business," Barclays's Aiken said. "They already have a relationship, why not try to leverage it?"