An oil field in the Permian Basin, near Midland, Texas, U.S., is seen in this undated handout photo provided to the media on Wednesday, May 19, 2010. TD Securities is growing its operations in Houston to increase its U.S. energy portfolio.Bloomberg
TD Securities is expanding its Houston office in a bold move to boost its securities and wholesale banking business south of the border.
Toronto-Dominion Bank's capital-markets arm said Wednesday it has hired eight new energy-focused employees and is adding to its portfolio of loans in the energy sector, which TD Securities said will help complement the business it had built up organically.
TD has been steadily increasing its presence in the United States in recent years, said Glenn Gibson, vice-chair of TD Securities in the U.S., but he characterized the energy expansion as the "first major push" that the group has made. The new hires nearly double the size of TD Securities' U.S. Energy group to about 16 people.
The eight-person team of energy specialists includes senior investment bankers and credit managers in Houston. The team comes to TD from Royal Bank of Scotland by way of Japan's Mizuho Bank, which bought a corporate-loan portfolio and brought over employees from the British lender earlier this year.
That shakeup provided TD the chance to add talent at a tumultuous time for the energy industry. "We've been in the energy business a long time – everybody knows it's a cyclical business," Mr. Gibson said.
Alongside the new hires, TD Securities recently acquired a $1.7-billion portfolio of loan commitments, which represents about 20 U.S. companies in the oil, gas and utilities businesses.
TD has built up a large pile of deposits in the U.S., thanks to the growth of its personal banking business. The bank has been looking for ways to fund more loans, especially to larger companies, to get higher returns from those deposits. Such relationships can also open doors for banks to do more business with these clients, such as advising on deals.
TD's growth strategy is to expand in the sectors where its wholesale business is strongest, such as the media and telecom. Energy and a diversified group of cross-border U.S. clients, with a connection to Canada through a retail or brand presence, are other areas of focus.
"We've built a product group now in the U.S. that can actually add to, and complement, our overall wholesale offering," said Mr. Gibson. Debt capital markets are the anchor of that product suite, he said.
TD is not alone in looking to build its energy presence in the U.S. Among the Canadian lenders, Bank of Nova Scotia has emerged as a significant energy lender in the U.S. through its oil and gas arm Scotia Waterous.