TORONTO — TD Ameritrade Holding Corp. isn't interested in acquiring the assets of E-Trade Financial Corp., the head of the U.S. online broker said.
"We would do any transaction that made strategic and financial sense to us, but we still have not seen (E-Trade) to be obvious, given some of their issues, particularly with respect to their assets," said TD Ameritrade Chief Executive Fred Tomczyk.
Tomczyk, who was speaking at a financial services conference hosted by Scotia Capital in Toronto, was answering a question on the competitive landscape in the U.S.
Analysts have long speculated that Omaha, Neb.-based TD Ameritrade, 43.8% owned by Canada's Toronto-Dominion Bank, is a potential acquirer of E-Trade given the similarity in their business models and allure of E-Trade's brokerage clients, but E-Trade continues to wrestle with its troubled mortgage portfolio. The New York-based company, under pressure from its largest shareholder, Citadel LLC, to discuss a possible sale, last month hired Goldman Sachs Group Inc. to conduct a review of strategic alternatives.
"We're really not interested in the assets," said Tomczyk. "We would either sell them, outright, or TD would take them. But, I would see TD only paying a reasonable price, not an optimistic price because there are some significant issues in that asset pool."
Earlier Wednesday, TD CEO Edmund Clark, speaking at the same conference, said that TD was "working hard" with TD Ameritrade to exploit "cross-synergies" that would strengthen both organizations, such as TD Ameritrade's technology.
"We believe that there's lots of synergies between the two organizations that strengthen both of them. And, we're looking at ways to do that," he said.
Clark wasn't asked about a potential E-Trade deal. The bank has previously declined to comment.
Clark said TD, which earlier this year completed its acquisition of Chrysler Financial Corp., has been slower to build an asset-gathering business in the U.S. given the fragile economic growth.
"The other strategic issue we face is that we are fantastic at generating deposits. We've been slower building a franchise on the asset-gathering side. And, we've been frankly cautious given the business outlook in the U.S. And, so, you don't blow yourself up creating deposits; you can blow yourself up creating assets," he said.
"I think Chrysler is a good first step to filling in that gap, and we're going to continue to look for things, but continue to be cautious."
