Canadian bank to buy Chrysler Financial

“We’re taking advantage of a disruptive market to add on assets that in the heyday you could never buy for these kind of prices,’’ Clark said. “We’re already a top 10 player in the US. We’re getting even bigger.’’

New York-based Cerberus bought Chrysler Financial in 2007 as part of the $7.4 billion deal to take over Chrysler’s automaking and lending businesses. Cerberus handed over control of Chrysler’s automaking operations to the government when the company nearly ran out of cash and faced liquidation in 2008.

The car business was a drain on Cerberus, but the financial services business could end up at least breaking even. The private equity firm is expected to recoup its investment in Chrysler Financial, returning some money to investors who had been unhappy with Cerberus’s deal with the automaker from the start.

TD wants to expand its loan business, and said the deal will give it access to technology that can process more than 2 million credit applications per year. The auto lending market hasn’t taken as much of a hit as other kinds of consumer loans over the last several years. And the value of used cars is picking up as the economy improves.

The deal is the second US acquisition in a week by a Canadian bank. Last Friday the Bank of Montreal announced it is buying Milwaukee-based bank Marshall & Ilsley Corp. for $4.1 billion in stock.

Canadian banks are investing in the United States from a position of strength, as they weathered the economic crisis far better than their counterparts in other countries. In a concentrated banking system dominated by five major players, Canadian banks have been looking across the border to find growth opportunities.