The History of TD Waterhouse
TD Waterhouse is a discount brokerage company in Canada. It is owned by U.S.-based Ameritrade, a securities and investment firm. The company has operated under a number of different names since its inception, but has continued on a path of steady growth and development. Today, TD Waterhouse is among the world's largest discount brokerages, with sales of more than $12 billion in 2008.
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Toronto and Dominion Banks
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The history of TD Waterhouse begins with the founding of the Bank of Toronto in 1855. Bank of Toronto soon began a major banking force in the country and was among the first mortgage providers in Canada. In 1871, Dominion Bank was opened in Toronto and soon became one of Bank of Toronto's largest competitors. The two companies helped fuel Canada's growth and investment for the next 80 years, particularly in railroads, timber and financial development. In February of 1954, the two companies merged to form the Toronto-Dominion Bank. The newly merged company started its first day of business with total assets of more than $1 billion.
Waterhouse History
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Waterhouse Investor Services was started in 1975 by Lawrence M. Waterhouse Jr. He started his company to take advantage of recent changes in investment laws that brought an end to fixed-rate commissions for stock traders. Waterhouse believed that he could help individuals invest in the stock market at a discount rate. During his first year of business, he generated $230,000 in commissions. By 1986, after little more than a decade in the business, Waterhouse Investor services generated $11.5 million in commissions. The next year, the company went public, raising nearly $6 million during its initial public offering. In 1995, the company earned more than $143 million, making it the fourth largest discount brokerage in the U.S. at the time.
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TD Waterhouse
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From the time of the Toronto and Dominion Bank merger in 1954 through the 1980s, the company focused on international expansion and smart investment, particularly in real estate. In 1984, TD Bank established a brokerage department known as Green Line Investor Services. Green Line quickly became Canada's largest discount broker, and the company began building on this success through international expansion. In April 1996, TD Bank purchased Waterhouse for $525 million. The price was considered quite high at the time, as it represented nearly six times the company's book value and three times its revenue from the previous year. After the purchase, TD Bank continued operating Green Line Investor Services as a separate entity from Waterhouse Investment for several years.
Merged Brokerages
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In 1999, TD Bank decided to streamline operations a bit by combining Waterhouse and Green Line under a single corporation. These two brands, along with the remainder of the bank's brokerage operations, were combined to form TD Waterhouse Group Inc. The company then put 11 percent of the new brokerage firm up for public offering on the New York Stock Exchange, which helped raise more than $1 billion in new capital. That same year, TD Waterhouse Group partnered with the Bank of Tokyo to form an online brokerage group for the Japanese market. By the end of the 20th century, TD Waterhouse was the second largest discount broker in the world.
The 21st Century
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By 2002, the TD Waterhouse brand was so well known that the company decided to use this name for all of its investment services. To distinguish it from regular investment offerings, the discount brokerage operations were renamed TD Waterhouse Discount Brokerage. In 2003, TD Waterhouse came close to merging with E*Trade Financial Services, but the deal ultimately fell through. In 2005, E*Trade began talks to buy Ameritrade, another discount brokerage. Rather than follow through on these talks, Ameritrade decided to purchase TD Waterhouse, which was spun off from TD Bank in 2005 as part of the sale. Today, the newly merged brokerage is known as TD Ameritrade in the U.S., though offices in Canada and Europe still use the name TD Waterhouse.
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