Waterhouse Investor Services, the discount brokerage subsidiary of Toronto-Dominion Bank, plans to announce a bid today to enter the U.S. retail banking market.

In a mailing set to go out next week, Waterhouse will invite 40,000 of its brokerage customers in the Northeast to do their banking with a newly formed electronic institution, Waterhouse National Bank, said David Livingston, a senior vice president at Canada's Toronto Dominion.

Toronto-Dominion plans to provide details of the effort at a press conference scheduled today.

According to Mr. Livingston, Waterhouse National will be entirely electronic. Initially accessible by telephone only, the bank will be available via the Internet in July.

Customers in New York, Massachusetts, Rhode Island, Vermont, and Maine will be targeted first, and the effort will be rolled out nationwide this summer.

"We don't think there are a lot of markets that are just crying to have another bank come in and hang up a shingle, so our goal is to capitalize on our discount brokerage customer base wherever it exists," Mr. Livingston said.

Toronto-Dominion bought New York-based Waterhouse in 1996. The discount broker has about one million customers nationwide. Because Waterhouse operates 117 offices in the U.S., its name is better known here than that of its Canadian parent, Mr. Livingston said.

Waterhouse National Bank will allow customers to access all traditional banking services, such as checking accounts, credit and debit cards, and lines of credit, Mr. Livingston said.

Though New York-based Waterhouse has hired several professionals to assist in the project, Mr. Livingston said that by focusing on electronic banking and outsourcing through joint ventures-such as with Fiserv Inc. to provide the deposit account structure-the bank has saved money.

"We have virtually no infrastructure within Waterhouse, and as result, we've kept the capital cost for building this relatively low," he said.

This month, Toronto-Dominion will offer U.S. banking services to its clients in Canada under its own name. It also plans to open an electronic bank in Australia, where Toronto-Dominion has a presence through two discount brokerage subsidiaries, Pont Securities and Rivkin, Croll & Smith.

In October, Toronto-Dominion bought California discount broker Kennedy Cabot & Co. for a reported $155 million.

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