Both firms have also signed a seven-year program agreement, following which the former will operate as the sole issuer of Target-branded Visa and private label consumer credit cards to Target’s US customers.
TD Bank group president and CEO Ed Clark said the long-term agreement with Target will help expand its presence in the North American credit card business.
"This asset purchase aligns perfectly with our risk profile and strategy, and will contribute to achieving our stated adjusted earnings target of US$1.6 billion from our U.S. P&C segment in 2013," Clark added.
As per the terms of the agreement, the lender will acquire more than five million active Visa and private label accounts and fund the receivables for existing Target Visa accounts and all newly issued private label accounts in the US.
The bank serves nearly 22 million customers in four key businesses operating in a number of locations in key financial centers across the globe. It had CDN$806bn ($813bn) in assets on 31 July 2012.
