Impact For Toronto-Dominion Bank Of Schwab's Acquisition Of TD Ameritrade - M&A Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Congrats on the deal, first of all. Second -- I've got 2 here. One is on that excess spread. And Riaz, you alluded to it. I know it's a state secret, but I'm hoping you can give us a sense of size of how important this additional revenue stream is to you because all we can see is the 25 going to 15, but there's still another piece of the puzzle that we don't see.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. I'll have to follow up on that one. Then my next one. Similar to Sumit earlier, but maybe I'll ask a bit differently. You're going from owning 43% of something with 5 or 6 Board seats to owning 13% with 2 Board seats. Just wondering how we should view that investment going forward. Is it a core asset still? So in -- I mean the scenario that I think a lot of people think about is if a big U.S. regional bank acquisition opportunity pops up, this could actually be a source of funding or liquidity for you. Is that a fair assessment? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : . Just a couple of mechanical questions, maybe for Riaz. Today, when you report the U.S. segment for TD, the IDA economics, while within the segment, doesn't impact the segments, for example, net interest margin, as I understand it. Will that continue to be the case? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : And then from an equity accounting threshold perspective, I know you highlighted ownership, Board, contract significance and a few other things. Is there a point at which one of those tips it from being equity accounted to, I guess, investment accounted. I'm trying to figure out here if you lost the Board seat or if you -- if -- I don't know, if we get down to the $50 billion IDA level. Or is there -- I'm just trying to kind of get a feel for what's the risk level, so to speak, that this falls out of the equity accounting treatment.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : I appreciate that. And then just maybe one other clarification question. With respect to the IDA and $50 billion floor, just so that I understand, is it possible that you go to the below $50 billion sooner than running off at $10 billion a year. In other words, is it possible some of the Ameritrade IDA sweep deposits kind of get rebranded as Schwab? Or there's some mechanics there that the downdraft is quicker than $10 billion a year.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : I just wanted to -- Bharat, I just wanted to see if you could comment on how long does it take for a transaction like this to come together.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : So no time dimension that you would attribute to it.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : No, no. I mean, this transaction, right? I mean, this -- for this to come together, was it 6 months in the making? Was it 12 months in the making? Was it 6 weeks in the making?