TORONTO (Reuters) - Toronto Dominion Bank (TD.TO) said on Tuesday it will acquire Nordstrom’s (JWN.N) U.S. consumer credit card portfolio as the Canadian bank looks to use its strong balance sheet to expand its lending business in the United States.
The value of the deal was not disclosed. But under the terms, Nordstrom will receive a large slice of net revenue generated by the credit card accounts.
The move, which comes about two years after completing a similar deal with Target Corp (TGT.N), increases TD’s reach among top U.S. retailers and supplements its presence in the U.S. Northeast.
Nordstrom’s U.S. credit card portfolio is valued at about $2.2 billion in receivables. Under a long-term agreement, TD will become the exclusive U.S. issuer of Nordstrom-branded Visa and private label consumer credit cards.
Private-label credit cards are used by retailers without the stamp of a credit card company such as Visa or MasterCard and can typically only be used at that retailer alone.
TD has expressed a willingness to make acquisitions in the United States.
“Given the type of balance sheet we have in the U.S., we are also highly liquid and are always looking at opportunities that would fill out our balance sheet because we are rich in deposits but not as rich in loans,” Chief Executive Bharat Masrani said at a recent roundtable with media.
TD is one of the 10 largest banks in the United States, with over 1,300 branches along the eastern coast stretching from Maine to Florida.
Reporting by John Tilak and Euan Rocha Editing by W Simon