TD Not Spending Time ‘Trolling’ for U.S. Bank Deal, Clark Says
“We’re not spending our time trolling the M&A market in the United States, calling people up and saying, ‘Any chance you’d give me your bank?’,” Clark said on an Oct. 17 investor call, a transcript of which was posted today on the Toronto-based lender’s website. “We’ve been basically absent the deposit-gathering buying business for the last three or four years.”
Clark discussed topics including an Oct. 13 Sunday Times article suggesting Toronto-Dominion is considering a bid for Citizens Financial Group Inc., the U.S. retail lender owned by Royal Bank of Scotland Group Plc. Clark previously dismissed such a deal in February, saying it didn’t meet the bank’s criteria.
“What I said is still where we would be today,” Clark, 66, said when asked about the report during the call. “We don’t need a deal.”
Toronto-Dominion would need the market to endorse a deal since it would involve raising substantial equity, Clark said. Any transaction would have to be “financially great” for investors, he said.
“As one of the largest shareholders in this bank, I don’t want to do a deal that isn’t good for the shareholders,” Clark said.
Still, TD would be obligated to consider any transactions that became available, he said.
Clark spoke generally about the criteria for pursuing a large U.S. deal during the call, including the need to find cost savings.
“If we buy in-market franchises with large cost-cutting synergies, you have to believe that you can execute that, that you can actually take those costs out, because if you don’t take the costs out, then the deal doesn’t work,” he said.
Toronto-Dominion has become more interested recently in Citizens Bank, which is valued at about 8 billion pounds ($12.9 billion), the Sunday Times reported this month, citing unidentified analysts. Toronto-Dominion dismissed reports of interest in Citizens before, including during a Feb. 28 earnings call.
“Last quarter I indicated that if we were to look at a larger deal, it would need to fit the bank strategy, timing and risk appetite,” Clark said at the time. “In addition, it would need to meet our financial hurdles and be supported by the market. We do not believe that a transaction to acquire RBS’ Citizens Bank is available that meets these criteria.”
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