RY has clearly stated they wish to grow through capital markets and by increasing their asset management portfolio, I state this above. While the Ally acquisition may be possibly fortuitous, there isn't much basis for the timing of the acquisitions. The moves seem like they are brewed out of impatience, hoarding tonnes of cash over the past 5 years, these banks must do something.What do you think their stategies are?
TD has been very successful in expanding their network internationally, and made reasonable, albeit not overly profitable venture in the Eastern seaboard of the US. Those network expansions and carrying the TD brand of customer service to individual banking customers has been the basis of their growth over 10 years. Perhaps you could say the Target credit is simply more consumer services and hence lateral expansion in this niche, but bricks and mortar is what they have been good at, not credit (look at their Canadian mortgage portfolio and other lending activities).
Fair to disagree Sqrt, but what how do you believe these acquisitions fit into their strategies? I'm not making judgement on whether they will pan out or not since I have never looked deeply into Targets credit card portfolio, nor into Ally/ResMor, are they profitable? what is the risk etc? Of course the 2 banks have done their research and their management is presumably trust worthy, but when companies start to venture away from what they have been good at, then flags in my head begin to be raised.