CommSec buys TD Waterhouse

Commonwealth Securities will acquire rival online broker TD Waterhouse. The two are among Australia's largest retail online broking operations but TD Waterhouse said it would struggle to grow on its own in a small market such as Australia after posting a big loss in 2002.

CommSec says it will not raise brokerage rates as a result of the buyout. The Commonwealth Bank's profitable retail broking arm currently has 1.6 per cent of the total broking market in Australia and hopes to boost this to over 2 per cent with the acquisition of TD Waterhouse's 300,000 customers. CommSec will then have 1.1 million account holders although only around 400,000 are believed to be active.

CommSec says it will run TD Waterhouse Investor Services as it is until July but eventually the operations will be integrated. TD Waterhouse customers will ultimately enjoy lower brokerage fees. Its minimum trade is $25.95 compared to CommSec's $16.30.