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TD Bank plans major move into area

The new TD Bank branch on Wisconsin Avenue in Georgetown.
The new TD Bank branch on Wisconsin Avenue in Georgetown. (Gerald Martineau/the Washington Post)
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By Mike Musgrove
Washington Post Staff Writer
Monday, November 16, 2009

The financial meltdown that left many big banks reeling has created opportunities for others, including one Canadian-owned giant that has set its aim on Washington as one of its major new markets.

TD Bank, a subsidiary of Toronto-Dominion Bank, has opened five new locations in the Washington area this year; this past weekend it opened a Tenleytown branch, and it opened a Georgetown branch the previous weekend. More are on the way.

While TD has a strong presence in New England, it is only a tiny player in the Washington area, said Arnold G. Danielson, a Washington area banking industry consultant. With $1.3 billion in local deposits, TD holds less than 1 percent of the market, he said. To put it another way, "they've got a long way to go."

TD's biggest Washington area competitor, by comparison, is Chevy Chase Bank, which boasts around 250 branches and more than 1 million customers in the area.

That bank's network of branches is still expanding, too, said James Jackson, head of branch distribution for Chevy Chase's parent firm, McLean-based Capital One Financial. "As the population continues to grow, finding places for us to fill in growth will continue to be a part of our strategy," he said. Chevy Chase was acquired by Capital One Financial earlier this year.

For the Washington area, TD has more than 100 sites in the pipeline, said Kevin Gillen, TD's regional president for the area, and about half of those have already received the required local approval needed to break ground. The bank's longer-term goal is to open 200 branches in the Washington area.

Alexandria-based banking consultant Bert Ely said the bank will need that kind of footprint if the company is ever going to reach critical mass in the region.

Otherwise, he said, "their market share is not really enough, long-term, for them to make a profit in this market. They're too small."

From the looks of it, Ely said, most of the company's anticipated business will have to come at the expense of other banks. "When you go into an established area like Tenleytown, most of your business is going to come from taking it from other banks," he said. "The question is, why will they switch to TD?"

One of Canada's largest banks, Toronto-Dominion Bank, bought itself a foothold in the U.S. market in 2007 when it acquired Commerce Bancorp for about $8.5 billion. The move more than doubled the company's presence in this country.

The Canadian firm has embraced Commerce's designs for expansion in Washington. And it has followed Commerce's marketing approach in the States in an attempt to bolster its credentials as a consumer-friendly alternative. The typical TD branch offers candy for the kids, treats for the family dog, and free use of coin machines that count up pennies, nickels and dimes. More striking: Branches are open seven days a week.

It's not an approach that competitors have yet adopted, Ely said. "That's a great way to bring in customers, but is it profitable?" he said. "I couldn't tell you."

Washington is one of three markets that TD is actively pursuing, said Gillen; the company is also seeking to expand in Boston and Florida.

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