Canada's banks see windows closing for big deals

Tue Mar 30, 2010 2:34pm EDT
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By John McCrank and Andrea Hopkins

TORONTO (Reuters) - Canada's big banks, better capitalized than their global peers, took advantage of the disarray during the financial crisis by snapping up market share from distressed rivals, but good deals and rapid growth are becoming harder to come by.

Some U.S. banks that were in danger of collapsing a year ago are in better shape now and are seeking to win back market share, while others are being offered for sale by U.S. regulators but are becoming more expensive as the economy improves. Canadian banks say both trends could work against them as they try to make further inroads in the United States.

Toronto-Dominion Bank, Canada's No. 2 lender, was the only big bank in the United States to expand its lending book in 2009. TD Chief Executive Ed Clark said on Tuesday that the bank's TD Ameritrade discount brokerage took "huge" U.S. market share from Fidelity and Charles Schwab as they pulled back during the financial turmoil.

But Clark told analysts and investors that opportunities are fading as the industry rights itself.

"We have to accept that going into 2010 as you roll into 2011, everywhere in the world, the banks that were hurt are going to come back into the market and say, 'we're going to try to take some of that market share back from you ... we certainly are not going to give it away to you as easily as we did in the 2009 period'," he said.

Clark, speaking at National Bank Financial's Canadian Financial Services Conference in Montreal, said competition is increasing in every market, from the Canadian personal commercial market, to the wholesale market, the U.S. discount brokerage market and the U.S. banking market.

"Everywhere we go, we see competitors saying, 'I am no longer trying to survive, I'm now trying to regain my position'," he said.

TD has roughly as many branches in the United States as in Canada, though the U.S. deposit base is smaller and the branches offer fewer products, making them less profitable.   Continued...