×

CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S MARIA BARTIROMO INTERVIEWS TD BANK CEO ED CLARK ON "CLOSING BELL" TODAY

WHEN: Today, Wednesday, November 12th at 4:40 PM ET

WHERE: CNBC's "Closing Bell"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with TD BANK CEO ED CLARK, on "Closing Bell" Today.

All references must be sourced to CNBC.

----------------------------------------------------------------

MARIA BARTIROMO: JOINING ME IN ANOTHER CNBC EXCLUSIVE IS THE CEO OF TORONTO DOMINION BANK, ED CLARK. GIVE ME YOUR SENSE OF HOW THINGS HAVE IMPACTED YOUR BANK, HOW TOUGH IS IT OUT THERE? WE HAVE A CREDIT CRUNCH. ALL OF YOUR COMPETITORS ARE FEELING IT. WHAT ARE YOU SEEING?

ED CLARK: WELL, IN TERMS OF OUR MAIN BUSINESS, WHICH 90% OF EARNINGS ARE IN THE RETAIL, SMALL BUSINESS, COMMERCIAL, WEALTH MANAGEMENT AREAS, WE HAVE NOT REALLY BEEN IMPACTED. WE WERE VERY CONSERVATIVE IN OUR U.S. LENDING PRACTICES. DIDN'T GET INTO MANY OF THE PRODUCTS THAT OTHER PEOPLE DID. AND SO WE HAVEN'T HAD SIGNIFICANT LOAN LOSSES YET AND IN CANADA WE HAVE ALSO BEEN VERY CONSERVATIVE AND WE EXITED ALL THE MAJOR STRUCTURE PRODUCTS.

BARTIROMO: IN 2005 YOU CAME OUT AND SAID, WE WANT TO GET OUT OF THESE BUSINESSES

CLARK: RIGHT. I SPENT TIME LOOKING AT THEM AND SAID, THESE ARE DANGEROUS THINGS. THIS IS NOT GOING TO END WELL. BUT, LIKE ANY BANK, THE GENERAL MARKET DOWNTURN, WE'RE IN THE WEALTH MANAGEMENT BUSINESS SO OBVIOUSLY OUR MUTUAL FUNDS, THE VALUE GOES DOWN, OUR REVENUE GOES DOWN, WE'RE IN THE SECURITIES BUSINESS, YOUR INVENTORIES ARE MARKED TO MARKET AND SO THIS LIQUIDITY CRISIS IS HURTING THAT WAY. BUT I'D SAY, BY AND LARGE, WE HAVE BEEN RELATIVELY BLESSED.

BARTIROMO: WHAT ARE YOU SEEING IN TERMS OF PEOPLE TODAY, WHETHER IT'S DEPOSITORS OR MUTUAL FUND INVESTORS, WHAT ARE THEY DOING? ARE THEY HOARDING CASH? ARE THEY SHIFTING PRIORITIES? TELL US WHAT YOU SEE FROM YOUR WONDERFUL VANTAGE POINT.

CLARK: I THINK PEOPLE ARE TERRIFIED. I THINK WE REALLY HAVE SCARED THEM --AND NOT JUST THE U.S. CONSUMER, BUT CLEARLY THE U.S. CONSUMER, THEY'VE LOST LOTS OF VALUE OF THEIR EQUITY AND NOW THEY'VE LOST LOTS OF VALUE OF THEIR INVESTMENT AND THEY DON'T UNDERSTAND WHAT IS GOING ON. AND SO YOU'LL DEFINITELY SEE A MOVEMENT TOWARDS DEPOSITS, TOWARDS A FLIGHT TO QUALITY INSTITUTIONS AND QUALITY TO INVESTMENTS.

BARTIROMO: HOW CAN YOU COMPARE WHAT IS GOING ON IN THE UNITED STATES WITH WHAT IS HAPPENING IN CANADA? REALLY INTERESTING, THE FINANCE MINISTER IS ANNOUNCING THIS NEW CAPITAL AVAILABLE AND STEPS TO KEEP THE LIQUIDITY FLOWING THERE IN CANADA.

CLARK: YEAH. WE HAVE A UNIQUE -- WE ORIGINATE MOST OF THE MORTGAGES IN CANADA BUT KEEP THEM ON OUR BALANCE SHEET AND IN MANY CASES WE INSURE THEM. SO ABOUT 75% OF OUR MORTGAGES WE BOUGHT GOVERNMENT INSURANCE FOR THEM. SO THIS GIVES US A TREMENDOUS ASSET WHICH WE'RE SELLING BACK TO THE GOVERNMENT AND RAISING FUNDS WHICH MEANS WE DON'T HAVE TO BORROW IN THE TERM MARKET WHICH REALLY HAS CLOSED DOWN WORLDWIDE. SO CANADIAN BANKS ARE BLESSED BECAUSE THEY HAVE THIS VERY STRONG MORTGAGE FILE THAT DOESN'T SUFFER SIGNIFICANT LOSSES.

BARTIROMO: YOU'VE HAD A NUMBER OF ACQUISITIONS OVER THE LAST COUPLE OF YEARS FROM AMERITRADE TO COMMERCE BANK. YOU ARE BEGINNING TO CHANGE OVER THE BRANCHES OF COMMERCE BANK INTO TD BANK. TELL ME HOW THE INTEGRATION IS GOING AND ARE YOU GOING TO BE PUTTING YOUR CASH ON THE BALANCE SHEETS TO WORK IN TERMS OF DOING FURTHER DEALS EVEN IN THIS ENVIRONMENT?

CLARK: I THINK THE FIRST THING IS TO MAKE THIS MERGER WORK. WE'RE LAUNCHING TD BANK, AMERICA'S MOST CONVENIENT BANK. AND WHAT WE DO IS WHEN WE MAKE ACQUISITIONS, WE TRY TO BUY BUSINESS MODELS AND GREAT MANAGEMENT. AND WE'VE ALWAYS OPERATED IN CANADA AS A BANK THAT OWNED A CONVENIENT SERVICE SPACE, SO WE WIN JD POWER EVERY YEAR AND WHAT WAS GREAT ABOUT THE COMMERCE IS THEY OWNED THE CONVENIENCE SERVICE SPACE. SO WE WANT TO RESERVE AND BUILD THAT MODEL. AND THE REALITY IS, WE COULD DO FURTHER ACQUISITIONS BUT IN THIS ENVIRONMENT, I'M NOT UP FOR TAKING A LOT OF ASSET RISK RIGHT NOW AND WE HAVE A BUSINESS MODEL ACTUALLY THAT CAN LET US ORGANICALLY GROW AND TAKE THE MARKET SHARE EVERY YEAR SO WHY NOT JUST LET THAT MODEL ROLL?

BARTIROMO: BUT YOU DID HAVE INTEREST IN WASHINGTON MUTUAL BEFORE IT WAS SNAPPED UP BY JP MORGAN. HOW COME YOU DIDN'T GO FORWARD WITH THAT?

CLARK: WE DIDN'T LIKE THE ASSET RISK.

BARTIROMO: TOO RISKY?

CLARK: YES, FOR US TOO IT'S RISKY. WE DON'T NEED TO DO AN ACQUISITION. WE CAN GROW. WE'VE PROVEN THIS IN CANADA. WE CAN PROVE THIS IN THE UNITED STATES. SO IF YOU DON'T NEED AN ACQUISITION TO GROW, THEN I THINK YOU GET PICKIER ON THE ASSETS THAT YOU BUY.

BARTIROMO: GIVE ME A SENSE OF WHAT IS GOING ON IN WASHINGTON. YOU HAVE HANK PAULSON SAYING THAT THE TREASURY WON'T USE THE $700 BILLION T.A.R.P. PLAN TO BUY THE TROUBLED ASSETS FROM THE BANK AND CONTINUE ON THIS PATH OF TAKING STAKES IN BANKS. ARE YOU COMFORTABLE WITH THAT?

CLARK: WE TRY TO AVOID THAT IN CANADA. I WOULD JUST AS SOON LET THE MARKET SOLVE THIS PROBLEM. I THINK IF I HAVE TO GO RAISE EQUITY IT'S BETTER THAT I GO RAISE IT IN THE MARKET AND HAVE THE DISCIPLINE ON ME OF JUSTIFYING WHY AND HOW I'M GOING TO USE THE CAPITAL. THE UNITED STATES MAY WELL BE IN A SITUATION THAT'S DIFFERENT BECAUSE I THINK THERE ARE THERE ARE DEEP ASSET PROBLEMS IN MANY U.S. BANKS AND I THINK THAT IS WHAT HE'S RESPONDING TO. IF I HAVE A CONCERN, IT'S THAT -- IT'S A BIT LIKE RUNNING A COMPANY. I DON'T BELIEVE YOU BUILD GREAT FRANCHISES BY CHANGING YOUR STRATEGY EVERY SIX MONTHS OR EVERY YEAR. I THINK YOU HAVE TO HAVE A STRATEGY. YOU ADAPT IT TO THE CIRCUMSTANCES. YOU STAY WITH THE SAME STRATEGY. MY WORRY RIGHT NOW , THE MOST IMPORATANT THING, IS TO RESTORE CONSUMER AND INVESTOR CONFIDENCE. AND SO I THINK THE SOONER WE GET TO A SINGLE GAME PLAN, TO SAY THAT'S WHAT WE'RE DOING, WE'RE GOING TO STICK TO IT, AND FRANKLY GIVE THE MARKET TIME TO SEE WHAT THE RESULTS OF THE MEASURES THAT YOU'VE ALREADY TAKEN.

BARTIROMO: HAS THE TREASURY CONTACTED YOU IN TERMS OF GETTING A STAKE IN TD?

CLARK: WE'RE IN CONSTANT COMMUNICATIONS WITH REGULATORS -- AND US ACQUIRING OTHER COMPANIES, BUT, NO, WE'RE NOT ELIGIBLE FOR THE PREFERRED SHARES AND FRANKLY WE DON'T WANT THE PREFERRED SHARES.

BARTIROMO: OKAY. WE'LL LEAVE IT THERE. GOOD TO HAVE YOU ON THE PROGRAM.





About CNBC:
CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.