Toronto-Dominion Bank announced that it will be paying about $668-million (U.S.) to take over U.S. asset manager Epoch Holding Corp., as the bank unveiled fourth-quarter profits of $1.597-billion (Canadian), a slight increase over the $1.589-billion profit it reported in the same period a year ago.
Epoch, an eight-year-old firm that is based in New York City and has 65 employees, will immediately strengthen TD’s U.S. wealth business, Mike Pederson, the bank’s head of wealth management, said. If the deal goes through it will add about $24-billion (U.S.) in assets under management to the $207-billion already managed by TD Asset Management. Epoch would keep its brand name.
Roughly half of the profits TD announced for the latest quarter, or $806-million (Canadian), came from its Canadian personal and business banking franchise. Those profits were 7 per cent higher than a year ago. “Looking ahead, we expect a more challenging operating environment in 2013, with low interest rates and moderating retail volume growth,” Tim Hockey, who leads that business, said in a press release.
TD’s wealth management and insurance business contributed $293-million, down 15 per cent from a year ago. While fee-based revenue rose because client assets did, decreased trading volumes cut into profits.
The bank’s U.S. personal and business banking division earned $321-million (U.S.), an increase of 10 per cent. “As we look ahead, we remain concerned about the low interest rate environment and regulatory uncertainty,” stated Bharat Masrani, head of the U.S. business, who added that on the bright side the U.S. economy is showing signs of modest recovery.
Wholesale and investment banking brought in $309-million (Canadian), also up 10 per cent.
TD’s total fourth-quarter profits amounted to $1.66 per share, down from $1.68 a year ago.