TD Bank takes over Nordstrom credit card portfolio

TD Bank is taking over retailer Nordstrom's credit card portfolio in the U.S. and will become the exclusive issuer of Nordstrom credit cards.

Nordstrom is the high-end U.S. retailer that is establishing itself in Canada with stores in Toronto, Ottawa, Calgary and Vancouver. The first store has opened in Calgary.

TD is buying Nordstrom's existing U.S. Visa and private label consumer credit card portfolio, which currently totals approximately $2.2 billion US in receivables, it said in a news release Tuesday.

TD Bank Group CEO Bharat Masrani says the purchase is part of strategy to grow its North American credit card business.

In 2013, TD Bank took over the Aeroplan travel rewards program.

Nordstrom said it began looking for a partner to take over its credit card business a year ago.

Barclays analyst John Aiken saw the move as positive for TD Bank.

"TD is following a well-worn path in its acquisition of credit card portfolios and we have little doubt that the Nordstrom acquisition and strategic partnership will bear fruit over time," he said in a note to clients.

The deal will support TD's earnings growth and profitability improvement in the U.S., he said.

"Further, the acquisition of assets in the U.S. provides for more optimal deployment of its surplus liquidity."

No financial terms were released for the deal, whichis expected to close in the second half of 2015.