Toronto-Dominion Bank said Tuesday it is considering a public offering of about 20% of its growing discount brokerage business, a deal that could raise more than $1 billion for further expansion.

The $120 billion-asset Canadian bank has pursued a global strategy with its discount brokerage and already has made inroads in the United States.

"We really like this business and see it as a high growth" area, said Duncan Gibson, a vice chairman.

Mr. Gibson said the bank's leadership remains undecided on the public offering but added that a "currency" may be required for continued expansion in investments. And bank executives are encouraged by the current market valuation of discount brokerage stocks, he said.

The rise in popularity of on-line investing has fueled a tremendous upsurge in the valuation of discount-brokerage stocks in recent months, according to industry observers.

Shares of E-Trade Group, the deep discounter based in Palo Alto, Calif., have surged to $82, from a low of $10 in the first week of October, said Bill Burnham, an electronic commerce analyst in the San Francisco office of Credit Suisse First Boston. In the same period, shares of Charles Schwab & Co. - a company on which Toronto-Dominion would like to model its brokerage business - have risen to $61, from about $21.06.

"If the market stays hot, they'll need that currency for acquisitions," said Timothy M. Klein, an analyst in the San Francisco office of Piper Jaffray Inc.

Mr. Burnham said a 20% stake in the Canadian bank's discount brokerage businesses would be worth from $1 billion to $2 billion. Waterhouse Investors Services, the bank's New York subsidiary, has consistently ranked among the top 10 such firms in market share.

"The history of T-D and Waterhouse has been growth through acquisition, and I think it will be in the future," Mr. Burnham said. "As a public entity they would have a greater ability to grow."

Through Waterhouse, the bank acquired two California firms in the last two years, Kennedy Cabot & Co. and Jack White & Co. It also operates discount brokerage units in Canada, Britain, Hong Kong, and Australia.

However, few independent discount brokerage operations remain on the market, Mr. Burnham said. Ameritrade Inc. of Omaha, currently trading around $59.81, and E-Trade are among those not owned by banks or large investment firms. E-Trade might be "expensive," Mr. Burhnam observed.

Toronto-Dominion is not alone in looking to tap into current market levels for discount brokerage stocks.

Donaldson Lufkin & Jenrette Inc. in New York said last week that it would explore spinning off a portion of its on-line subsidiary, DLJ Direct, to investors.

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