Friday, December 21, 2007

TD: Banking can be this self-serving

Obviously TD Bank’s idea of being a good corporate citizen revolves around doing what’s in the TD Bank’s narrow self interests, as opposed to the interests of its clients or the financial markets in which it is a participant. Take their entirely hypocritical position on the income trust tax vis-a-vis their position on the unfolding ABCP fiasco.

In the case of the income trust tax, despite the fact that Canadians have lost $35 billion in their retirement savings and despite the fact that Stephen Harper brought total certainty to the capital marketplace with his promise to never tax income trusts., here is the TD Bank’s official position on the reversal of Harper’s promise:

“TD Bank Financial Group considers the fact that there is now a greater measure of certainty in the marketplace on this issue as being a good thing.”

Importantly, this followed the words: “As you already know, the Minister of Finance’s plan is based on the assertion that the federal treasury has lost millions in tax revenue”.

Therefore, if we are to take TD’s line of reasoning, they prefer the market certainty associated with Harper’s broken promise as opposed to the market certainty associated with Harper’s promise promise. Furthermore the TD Bank prefers the market certainty associated with the broken promise, even though the broken promise is predicated on nothing more than the “assertion that the federal treasury has lost million in tax revenue.” What kind of logic and reasoning is that?

That said, do you suppose the TD Bank would authorize a loan based on the “assertion that the federal treasury has lost millions in tax revenue”? A mortgage? Personal line of credit? ABCP? Didn’t think so. What’s good for the goose, is bad for the gander.

Meanwhile we have the Asset Backed Commercial Paper matter to deal with, in which the TD Bank is the lone holdout. Or is it the loan holdout? The ABCP fiasco, we are told, is bringing untold uncertainty to Canada’s financial markets, in particular the lending market of which TD Bank is a major participant. TD Bank is a major participant in Canada’s financial services market because they have been basically granted a monopoly by the government. TD Bank was given special dispensation by Ottawa to acquire Canada Trust, from which TD’s current CEO hails and which forms a large part of what TD Bank is today. Perhaps all of this is completely lost on TD Bank. Where is the corporate citizen quid pro quo? Perhaps TD Bank only espouses the great need for “market certainty”, as in the case of the income trust tax, when it comes at the expense of others, including its many hundreds of thousands of adversely affected retail clients, about whom, TD Bank apparently it doesn’t give a wit about. Maybe TD Bank only espouse the need for market certainty when it positively affects its bottom line, as in the case of income trusts, since TD Bank has no active retail distribution network to speak of, which is why it performed so miserably in the income trust “league tables” and therefore benefitted from their legislated demise. Something on which I am told the TD Bank had input into before the fact, and before Harper’s act of voter betrayal.

Meanwhile all of this was predicated on what TD wisely points out is merely an “assertion of tax leakage”. TD Bank should know better than most about the absolute need for transparency on financial matters such as tax leakage or the precise nature of the assets which underlie Asset Backed Commercial Paper, since TD Bank was one of the few banks unwilling to distribute ABCP product, since we are told by them that they felt there was inadequate disclosure on ABCP. Again, they are proving their inherent penchant for corporate hypocrisy, since TD Banks believes that all Canadians should blindly take tax leakage as a god given truth. Meanwhile this is not how they conduct their own affairs as evidenced by their disclosure standards on ABCP. If it’s not good enough for TD Bank, then why should complete non disclosure about tax leakage be good enough for Canadians? And if TD bank is such a strong proponent in the face of client adversity about the need for market certainty, why are they the lone holdout on resolving the ABCP market fiasco? Or is TD Bank only ever interested in what’s best for TD Bank?

TD Bank: “Where banking can be this friendly.”.......not to mention this hypocritically self serving and narrow minded. Aren’t stock options great when it comes to achieving society’s best interests?


You've got bankers said...

I am ashamed to admit that I am a former IA with TD (yes the same folks that told us when Nortel was at $125 that it was going to $150).

Did they take their commission when I bought Income Trusts? .. sure did.

Did they take their commission when some of my Income Trusts were sold because of this hateful policy and I had to buy something else? .. sure did.

Did they sit idly by while Flaherty and company blunder along making compound policy errors? .. sure did.

Do they give a rat's bimbo about me, my kids and grandkids? .. I think not.

TD shareholder said...

I am saddened to see the shameful way this corporation has behaved on the Income Trust file.

Anonymous said...

You fool, the bank is a business, just like any other and it's decisions are based on that of making money. What do think the purpose of running a business is? To Fail?? One of the reasons TD is the most successful across North America is it's ability to make excellent decisions. Who are you to criticize these decisions?

Need I remind you that economies run based on the success of it's banks? We should be so arrogant to insult a company which has succeed in a market the rest of the world has not.

Think big picture my friend,

Anonymous said...

"Think big picture my friend"

Good grief, there's a self condemning comment if I've ever read one.

Where exactly does "speaking the truth" and "honesty" fall within your definition of the "big picture", or are money making business exempt from such concepts.

Anonymous, you really should consider applying for a job with the TD Bank, as it seems your value systems are completely aligned. You could start penning letters to TD clients spouting all the same self serving nonsense that was contained in this piece from Ed Clark's Executive Response Team.

Really, I think you've found your kindred spirit in the TD Bank . Go for it!

Brent Fullard