Canadian banking giant Toronto-Dominion Bank ( TD ) on Monday said it would purchase MBNA Canada's massive credit card portfolio for a "modest premium.".
The portfolio includes around $8.5 billion in credit card receivables.
TD commented, "We are very pleased to be acquiring MBNA Canada's credit card business. This acquisition will position TD as a top card issuer in Canada. We've consistently said that we will seize good opportunities that make strategic sense, fit within our risk profile and are financially attractive. This franchise brings new customers to TD, provides attractive additional options for our customers and is a great complement to our existing high-growth credit card business."
When the transaction is completed, TD will add come 1.8 million active accounts to its customer base.
TD Bank shares were unchanged in premarket trading Monday.
The Bottom Line
Shares of TD Bank ( TD ) have a 3.45% dividend yield, based on Friday's closing stock price of $76.53. The stock has technical support in the $70-$75 price area. If the shares can firm up, we see overhead resistance around the $80 price level.
Toronto-Dominion Bank ( TD ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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