National Bank of Canada through its subsidiary has entered into an agreement to buy the institutional services business of Toronto-Dominion Bank for C$250 million.
The business, known as TD Waterhouse institutional services, provides custody, trading, clearing and settlement for independent portfolio managers and brokers.
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The deal, which is expected to close later this year, is still subject to regulatory approvals and other conditions.
The purchase price for the acquisition may be subjected to a price adjustment mechanism based on asset retention.
The transaction is expected to increase National Bank’s 2014 and 2015 recurring EPS by $0.12 and $0.14, respectively, and will reduce its Common Equity Tier 1 ratio under Basel III rules by approximately 40 basis points.
Luc Paiement, co-president and co-CEO of National Bank of Canada, said: "Through this acquisition, we will extend our reach by adding over 260 additional market intermediaries who serve over 130,000 client accounts and manage approximately C$34 billion in assets."
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