Toronto-Dominion Bank (TD) is in talks to buy Chrysler Financial Corp. for as much as $7 billion, Bloomberg News said.
Toronto-Dominion may reach an agreement with Cerberus Capital Management, the owner of the auto-loan company, as soon as this week, Bloomberg News reported without naming its sources.
Cerberus is in discussions with other potential buyers and the talks with TD Bank could still fall apart. Dutch bank ING Groep (ING) may be interested, The Wall Street Journal said.
Chrysler Financial mostly consists of old auto-loans that consumers are still paying off, along with a platform and technology that could be used to launch a new lending business.
Toronto-Dominion has spent more than C$20 billion ($19.9) billion on expanding its presence in the U.S. market over the last six years. The bank now has 1,300 branches in the United States.
A spokesman for Toronto-Dominion declined to comment to Bloomberg News.
Last month, CEO Edmund Clark said he was interested in entering Canadian auto-leasing. Since 1980, domestic banks have been banned from this sector. The Canadian government is currently considering changing those regulations.
Cerberus purchased Chrysler and Chrysler Financial in 2007. Soon after, U.S. auto sales plunged and Cerberus lost control of Chrysler. Chrysler Financial repaid $1.5 billion of bailout funds to the U.S. treasury last year and sought to return to large-scale lending.