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The Globe and Mail

Morning Meeting: Bank acquisitions at $10-billion and counting

Mark Blinch/Mark Blinch/Reuters

A look at some must-read news on deals and deal makers around the world

Canadian bank buying spree continues

The regulatory cuffs on acquisitions and dividend increases have only just come off, and already Canada's banks are racking up the spending. First, National Bank of Canada boosted its dividend, then last week it was Bank of Montreal with its purchase of Marshall & Ilsley, with an up front cost of $4.1-billion (U.S.) plus another $1.7-billion to repay M&I's government aid.

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Now, Toronto-Dominion Bank TD-T adds the $6.3 billion purchase of Chrysler Financial to the list. TD sees the car-loan company as a way to generate loan growth in the U.S. market. TD says it can create return on invested capital of about 20 per cent in the next three to four years. That would be a significant step up from recent ROIC in its U.S. operations, which has hovered in the 5 per cent range for the past two years, far below what its Canadian operations produce consistently (often topping 30 per cent).

The acquisition solidifies TD's focus as a consumer bank -- taking in consumer deposits and lending them to consumers. By 2013, TD expects to be able to originate $1-billion of loans a month through the dealers that the auto finance company has ties to, with most of those being prime loans, the bank said in a presentation.

WikiLeaks and the banks

The New York Times' deal columnist, Andrew Ross Sorkin, takes a look at what the Wikileaks situation means for financial regulators. It isn't pretty.

Saskatchewan says no to National regulator

Saskatchewan, home of one of the country's less busy provincial securities regulators, is nonetheless saying no thanks to the idea of a national securities regulator. With few publicly traded companies in the province, the Saskatchewan Financial Services Commission is so small it has never faced some of the big national issues. For example, when BHP Billiton planned to challenge Potash Corp. of Saskatchewan Inc.'s anti-takeover defense, it would have been the commission's first-ever poison pill hearing. Regulators in Ontario, British Columbia and Alberta regularly tackle such issues.

Nonetheless, Saskatchewan wants to keep the jurisdiction over securities at the provincial level. While Saskatchewan is hardly a huge player in the securities market, its opposition takes to four the number of provinces allied against the idea, putting another nail in its coffin.

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Fund manager beats rivals by switching from Treasuries to Canadas

Loomis Sayles & Co. is beating its rivals in the bond investing game. How? Getting out of Treasuries into better performing markets like Canada and Indonesia.

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