Continuing a global expansion in retail financial services, T.D. Waterhouse Group said Wednesday that it would buy its third U.K. discount brokerage operation.
It will pay $127.5 million for Dealwise Ltd., a telephone-based broker headquartered in Leeds. 
New York-based T.D. Waterhouse has bought eight brokerages since 1996. In recent years it has pursued deals and joint ventures in discount brokerage that have taken its biggest stockholder, Toronto-Dominion Bank of Canada, to the United States and overseas.
The deals form a global network that will eventually allow Toronto Dominion to offer one-stop shopping in financial services with an online banking component. They also have put TD in a position to narrow the gap on Charles Schwab & Co., the leading discount brokerage.
Some big U.S. banks have taken a very different route, focusing on asset management, in particular on mutual funds, to increase fee income. But Stephen D. McDonald, chief executive officer of T.D. Waterhouse, said Toronto-Dominion sees discount brokerage as an important growth opportunity with "global positioning."
The strategy has certainly put the Canadian banking company on the map. It now has a presence in Australia, Japan, Hong Kong, India, and the United Kingdom as well as in North America.
Though T.D. Waterhouse is focusing on discount brokerage abroad, Mr. McDonald said the long-range plan includes online banking. "We think that's the direction the business is going in," Mr. McDonald said.
T.D. Waterhouse has put itself in a good position, observers said.
"They have some opportunities, and they need to capitalize on them," said Dan Burke, an e-commerce analyst with Gomez Advisors, in Lincoln, Mass. He cited growing consumer demand for one-stop shopping in financial services.
T.D. Waterhouse, which offers online banking in the United States through T.D. Waterhouse Bank, is fine-tuning its links between bank and brokerage accounts, said Mr. McDonald.
Some 60,000 customers who bank online with T.D. Waterhouse can transfer funds between accounts, and the company will soon allow customers to use a single log-on and password and offer consolidated statements.
Mr. McDonald declined to say how soon the company would look to incorporate online banking into its international strategy.
Meanwhile, Wednesday's deal, which is expected to close within weeks, would propel T.D. Waterhouse to No. 1 among brokers in Britain, based on the number of customer accounts and trading volume, Mr. McDonald said. With about 500,000 accounts under its belt, T.D. Waterhouse is set to leapfrog rival Charles Schwab & Co. and Barclays in that market.
With a population of 60 million, some 12 million of whom invest in equities, according to the Association of Private Client Investment Managers and Stockbrokers, Britain presents a fertile market for discount brokers on this side of the Atlantic.
On a global level, however, the race between T.D. Waterhouse and Schwab looks a lot different.
Banking executives have bold ambitions, said Mr. McDonald, 43, who is a vice chairman of the banking company and a 17-year veteran at Toronto-Dominion. "We are closing the gap with Schwab," he said. As a smaller company, he said, T.D. Waterhouse can "grow faster than they do."
At the end of March assets in customer accounts hit $172 million, the company reported, representing a increase of 70% over 12 months.
The company, which has pursued a successful hybrid strategy of "bricks and clicks" with 170 walk-in branches in 50 states, is also making headway in online trading. During the fourth quarter of last year, T.D. Waterhouse conducted 13.3% of the world's online trades, according to a study by Minneapolis-based U.S. Bancorp Piper Jaffray.
T.D. Waterhouse reported revenues of $382 million at the end of January, when its fiscal quarter closed, representing a 77% increase in revenues year-over-year.
Meanwhile, Schwab has posted a 52% increase in customer assets, to $823.2 billion at the end of the quarter, said Glen Mathison, a company spokesman.
"We don't believe our size inhibits us at all from continuing to compete effectively on behalf of our customers," Mr. Mathison said. Schwab will get even bigger when it closes its deal for New York private bank U.S. Trust Corp. in the coming months.
"Maybe no one catches up to Schwab," but "Waterhouse has one of the better models out there," said Steven Eisman, an equity analyst with CIBC World Markets Corp. in New York.
"We think our model is a very solid one; we think it has scalability," Mr. McDonald said. "This is an important sector to pursue and pursue aggressively."
