Late last month,
The Toronto-Dominion Bank
) - also known as TD Bank - closed the acquisition of U.S. based
Epoch Holding Corporation and its fully owned subsidiary Epoch
Investment Partners, Inc. The closure of this deal reinforces the
company's strategy to expand its footprints in the U.S.'s wealth
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TD Bank is likely to add about $25.9 billion in assets under
management to C$$211 billion, already being managed by TD Asset
Management. Meanwhile, Epoch will continue working under its
present brand name and operating structure.
Further, the acquisition will be accretive to the earnings of TD
Bank in fiscal 2014, besides having a minimal impact on the
earnings in fiscal 2013. Also, the company's Basel III Tier 1
common equity ratio is expected to decline nearly 25 basis points
from 8.8% as of Jan 31, 2013.
Moreover, the acquisition will considerably strengthen the
U.S.-based wealth management unit of TD Bank and significantly
widen the variety of product it offers to institutional and
retail clients in Canada.
With over 20 years of expertise in investment management, Epoch
is one of the highly successful asset management firms in the
U.S. Further, management at TD Bank believes that this deal will
provide both the firms an excellent opportunity to serve the
clients in a more efficient manner.
Earlier in Mar 2013, TD Bank closed an acquisition with
) to acquire Target's U.S. Visa and private label card portfolio
with gross outstanding balance of $5.7 billion. Moreover, the
company also entered into a 7-year agreement to be the exclusive
issuer of Target-branded Visa and private label credit cards.
We expect TD Bank's strategy to expand in the U.S. market through
acquisitions and will enable it to improve overall earnings,
going forward. Further, the aforesaid acquisition will likely be
accretive to the revenue of the company's Wealth and Insurance
Currently, TD Bank retains a Zacks #4 Rank (Sell). However, other
foreign banks like
Banco Bilbao Vizcaya Argentaria, S.A.
ICICI Bank Ltd.
) carrying a Zacks Rank #1 (Strong Buy) are worth considering.