05/26/2015 10:08 EDT | Updated 05/26/2016 05:59 EDT

TD Bank acquires Nordstrom credit card portfolio, become exclusive issuer

TORONTO - TD Bank (TSX:TD) has signed a deal to acquire U.S. retailer Nordstrom's existing U.S. Visa and private label consumer credit card portfolio, which totals roughly $2.2 billion in receivables.

The bank has also signed an agreement to become the exclusive U.S. issuer of Nordstrom-branded Visa and private label consumer credit cards to Nordstrom customers.

"This agreement with Nordstrom, achieved through great partnership and collaboration, continues the success of our growing North American credit card business," TD Bank chief executive Bharat Masrani said in a statement Tuesday.

Terms of the deal were not disclosed, however TD said it would fund the transaction with available resources.

Under the arrangement, Nordstrom will continue to perform account servicing functions.

The retailer will also will continue to fund and manage the Nordstrom Rewards loyalty program, Nordstrom debit cards and Nordstrom employee accounts.

"We found TD to be a strong cultural fit, sharing our customer-focused approach and providing capabilities to help us further enhance the customer experience," Nordstrom co-president Blake Nordstrom said.

Barclays Capital analyst John Aiken viewed the deal as positive for TD.

"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," Aiken wrote in a note to clients.

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

The deal is expected to close in the second half of this year.

Nordstrom opened its first store in Canada last year in Calgary.