- Toronto-Dominion Bank (TSX:TD) expects civil and criminal investigations by U.S. regulators into its anti-money laundering program to be resolved
- To prepare for a global settlement, which will include monetary and non-monetary penalties, the bank has set aside US$2.6 billion in its Q3 financial results
- This charge has taken a significant hit to TD Bank’s Q3 2024 financial results, the bank reported a loss of C$181 million
- Shares of Toronto-Dominion Bank (TSX:TD) opened trading at C$79.85
Toronto-Dominion Bank (TSX:TD) has set aside US$2.6 billion as it expects civil and criminal investigations by U.S. regulators into its anti-money laundering program to be resolved soon.
U.S. regulators, along with the Financial Crimes Enforcement Network and the U.S. Department of Justice have been investigating the big bank.
To prepare for a global settlement, which will include monetary and non-monetary penalties, the bank has set aside US$2.6 billion in its Q3 financial results, which is the bank’s current estimate of the total fines associated with these issues. The bank expects the global settlement will be finalized by the end of the year.
TD announced this week it will sell 40.5 million shares of common stock in The Charles Schwab Corp. This transaction will reduce TD’s ownership in Schwab from 12.3 per cent to 10.1 per cent. As part of this sale, TD has agreed not to sell any more Schwab shares for 45 days, with certain exceptions. TD currently has no plans to divest additional shares.
After this provision, TD’s Common Equity Tier 1 ratio will be 12.8 per cent, 2024. In TD’s fiscal Q4, the provision will further negatively impact its Tier 1 ratio by 35 basis points because of increased operational risk. The Schwab share sale will also boost TD’s Tier 1 ratio by 54 basis points in fiscal Q4.
“We recognize the seriousness of our U.S. anti money laundering program deficiencies and the work required to meet our obligations and responsibilities is of paramount importance to me, our senior leaders, and our boards,” Bharat Masrani, TD’s president and chief executive officer, said in a news release. “Our remediation program is well underway. The bank is also making important investments in data and technology, training and process design.”
This charge has taken a significant hit to TD Bank’s Q3 2024 financial results. Released on Thursday, the bank reported a loss of C$181 million, which amounted to 14 cents per diluted share. The result compared with a profit of C$2.88 billion or C$1.53 per diluted share a year ago.
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The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group. TD is the sixth largest bank in North America by assets and serves more than 27.5 million customers. TD had $1.97 trillion in assets on April 30, 2024.
Shares of Toronto-Dominion Bank (TSX:TD) opened trading more than 2 per cent lower at C$79.85.
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