National Bank pays $ 250 million for a division of TD

National Bank puts his hand on the TD Waterhouse Institutional Services, which provides services to independent investment managers, for $ 250 million.TD Waterhouse Institutional Services provides custody, trading, clearing, settlement and recordkeeping, registered portfolio managers and introducing brokers Canadian independent.
"Through this acquisition, we will expand our reach to more than 260 additional market intermediaries, 130,000 accounts and about $ 34 billion of assets," said Luc Paiement, Co-President and Co-CEO, National Bank Financial, and Executive Vice -EVP - Wealth Management.
TD Waterhouse Institutional Services is indeed 260 market intermediaries who have 130,000 accounts and combine assets of $ 34 billion in assets.
National Bank expects the transaction to add $ 0.12 per share in annual profit in 2014 and $ 0.14 per share to that of 2015.
National Bank also believes that the transaction will reduce its ratio of equity attributable to common shares (Common Equity Tier 1) under Basel III by approximately 40 basis points.
It is expected that this ratio, however, remains above 8% after the closing of the transaction, which is expected to occur later this year, subject to the requirements and conditions of the transaction other regulatory approvals.
"I am confident that our customers and employees will continue to develop fully with the National Bank, said Mushtak Najarali, Senior Vice President, TD Waterhouse Institutional Services. This acquisition will also provide the National Bank a team of high-level employees. "
The transaction is neutral to the National Bank, says André-Philippe Hardy of RBC Capital Markets, as the negative impact on the capital balances the contribution to profits.
The network of the National Bank is very profitable for the bank, said John Aiken of Barclays. In the short term, the integration effort will diminish profitability, but the savings will be favorable in the medium term
The transaction is minor since it represents less than 2% of its profits in 2014, he said.