TD Ameritrade reportedly has joined forces with Toronto-Dominion Bank to make a bid for Scotttrade.  TD Bank would get Scottrade’s banking assets and some 500 branches, while TD Ameritrade would get its discount core brokerages; it would raise as much as $2 billion in equity as part of the transaction.

Citi analyst William Katz thinks the joint bid makes sense, given the need to split out Scottrade’s banking and brokerage units.  Katz does caution that Scottrade has struggled to find top- and bottom-line growth in the last 2 years, and the deal would mean that TD Ameritrade is even more levered toward the retail trading business - rather than advice offerings - the latter where more growth and multiple expansion would lie, in his opinion.