* TD CEO says "indirect exposure" to oil slump a concern
* TD CEO says bank would consider Southeast U.S. purchases
* TD CEO calls for tougher scrutiny of alternative lenders
(Adds CEO comments from conference call)
By Matt Scuffham
TORONTO, March 31 (Reuters) - Toronto Dominion Bank TD.TO ,
Canada's second biggest bank, said on Thursday that it expected
losses from bad loans in the oil and gas sector to be manageable
and would consider acquisitions in the United States.
TD has set aside a comparatively low amount to cover loans
that have turned sour. Gross impaired loans in the oil and gas
sector fell to C$86 million in the first quarter from C$93
million in the fourth quarter. Other Canadian banks, such as
Bank Nova Scotia BNS.TO , have warned of much higher losses.
ID:nL2N1640NK ID:nL3N1693XI
"We remain confident that any losses in our oil and gas
portfolio will be manageable given the small size of this
exposure relative to our overall balance sheet," Chief Executive
Bharat Masrani told shareholders at the bank's annual meeting.
However, Masrani acknowledged that the collapse in global
commodity prices presented Canada with its biggest economic
challenge, causing "a lot of pain in many parts of the country"
and said he was concerned about the "indirect exposure" of the
oil price slump on the bank's customers.
"It is the indirect exposure, not just from a financial
perspective but I think sometimes it is underestimated what it
does to the local economy and what it does to our customers...
Do I worry about it? Yes," he told reporters on a conference
call following the meeting.
Masrani said TD would consider acquisitions in the United
States, especially in the Southeast, to accelerate growth.
"If there are compelling opportunities both from a strategic
and a financial perspective that emerged we would certainly look
at it seriously, particularly if there are opportunities in the
Southeast of the U.S. where we are still relatively small
compared to what our Northeast franchise might be," he said.
TD has grown rapidly in the U.S. where it is now one of the
10 biggest banks with more than 1,300 branches and around $250
billion in assets.
Masrani also called for policymakers to consider subjecting
alternative lenders to the same regulatory scrutiny as
traditional banks. Peer-to-peer lenders have grown rapidly
around the world, allowing investors to lend directly to
individuals and businesses via low-cost online platforms.
"When you have providers that are more bank-like then I
think it is important that they follow bank-like rules and
standards that will make sure that their customers are protected
from issues such as solvency," he said.