Irish unit of Canada’s Toronto-Dominion’s mulls seeking full banking licence here

Toronto-Dominion Bank’s Irish unit, which serves as the post-Brexit EU hub for the Canadian group, is exploring applying for a full banking licence here to expand the services it can offer clients across Europe, according to sources.

The unit, TD Global Finance Unlimited, received authorisation from the Central Bank of Ireland four years ago to expand an existing investment firm licence under the Markets in Financial Instruments Directive.

Any move to secure a full banking licence here would see the company continue to target wholesale clients, rather than signal an ambition to get into retail banking. It may also see the business be deemed a so-called significant bank by regulators, which would bring it under the direct supervision of the European Central Bank’s Single Supervisory Mechanism (SSM), the sources said.

TD Global Finance’s assets grew by more than a fifth in 2022 to €21.1 billion of assets at the end of 2022. Key criteria for a bank falling under the supervision of the SSM include having assets of more than €30 billion or a high degree of cross-border activities. The Irish unit received a $450 million (€414 million) capital injection from its parent last summer, according to company filings, to underpin growth.

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A spokesman for the company declined to comment.

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TD Global Finance, headed by chief executive Enda Kilcullen, has about 190 staff. It is primarily involved in the placing and trading of bond products, foreign exchange, equity derivatives and short-term loans to financial market participants that are backed by securities.

News that TD Global Finance is exploring applying for a banking licence flies in the face of speculation in Dublin financial circles in recent times that the Canadian financial group might move its EU hub to another European location.

UK banking giant Barclays signalled last August that it was considering moving its fledging EU headquarters from Dublin to Paris, less than five years after it chose the Irish capital as its European hub as a result of Brexit. Barclays Bank Ireland, which is known internally as Barclays Europe, and TD Global Finance occupy space in the same office building on Dublin’s Molesworth Street.

Barclays said that any decision to move its EU headquarters would only affect “a small number of roles” in Dublin, where its workforce has doubled to about 300 after the UK decided to leave the EU.

Barclays and Bank of America were the only big international banks to choose Dublin as their main banking hub in the EU following the vote. Citigroup had already established its EU base in the State six months before the Brexit referendum. AIB, Bank of Ireland, Barclays, Bank of America Europe and Citigroup’s Citibank Europe are the current Irish lenders subject to direct SSM supervision, which involves joint teams from the ECB and Central Bank of Ireland.

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