TD Moves Into Florida

by Barry Weisleder

While most of us have been trying to cope with the ongoing ‘Great Recession’, Canadian bankers have been busy with their own expansion plans. Showing that Canada’s banks weathered the crash better than their American counterparts, TD Bank (formerly the Toronto-Dominion) bought three insolvent Florida banks to establish its retail presence in the U.S. southeast.

TD’s purchase of Riverside National Bank of North Florida, First Federal Bank of North Florida, and AmericanFirst Bank is a low-risk venture since the U.S. Federal Deposit Insurance Corp. agreed to share 50 per cent of the loan losses up to specific thresholds at each bank, beyond which the FDIC would handle 80 per cent.

TD is getting 69 new branches in Florida, bringing its total there to 103. It already has a major presence in New England and New York, and owns 40 per cent of TD Ameritrade, a discount brokerage based in the U.S. Midwest.

One elite’s loss is another’s gain. That’s why we call it inter-imperialist rivalry, sometimes the stuff of wars. But this one is still well under control as high-finance operators make the average Jill and Jack pay the price in lost homes, jobs, and pensions.

Meanwhile, as bank profits in Canada soar, and corporate taxes decline, consumer debt is rising fast. In Canada, disposable income growth has been going down, and in the year ended last February, household debt went up more than three times faster than income growth. Canadians have seen their liabilities rising twice as fast as their assets over the past two years—despite the rebound in stock valuations and the recent surge in home prices.

“Canadian consumer fundamentals are weaker than they have been in almost 15 years,” reported CIBC economist Benjamin Tal on April 1. When will the next bubble burst, and who will pay the price?