In Banking, Scale Is Crucial for Success Because You Can Spread Your Technology and Network Costs over a Broader Base

In 2000, Baillie told me in an interview for a documentary called Titans, based on Peter C. Newman’s book of the same name, that he had wanted to run a large corporation ever since he was a young boy. He got his chance in 1995, becoming president of TD when Robin Korthals left, adding the CEO title in 1997 and the chairman’s title a year later, which he kept into 2003.

Baillie’s analytical mind had come to the conclusion that scale was crucial for success in banking. If you got bigger, you could spread your technology and network costs over a broader base. In Canada, that meant mergers of the big banks made sense. Beyond that, it meant planting the TD flag around the United States.

It had been decades since the last significant bank combinations in Canada. In the early 1960s, there was the marriage of the Imperial Bank and the Commerce Bank that created CIBC. Before that, there was the merger of the Bank of Toronto and the Dominion Bank in 1955 that had given birth to TD. Now, in the late 1990s, the Big Five banks were huge, with their tentacles reaching into all aspects of the economy. By and large, even though Canadians invested in them and liked their boring, stable ways, the banks were unpopular. No one liked the big fees they charged and people fumed when they saw how much money they made. They were also big employers. Mergers would mean closing branches and firing people. The banks were political dynamite.

—Howard Green, Banking on America: How TD Bank Rose to the Top and Took on the U.S.A. (Toronto: HarperCollins Publishers, 2013), 99-100.