'M&As would distract us,' says TD CEO, as he focuses on AML, organic growth
Toronto-Dominion Bank will stick to its goal of fixing its anti-money laundering program and look to grow organically instead of being “distracted” by mergers and acquisitions, its chief executive said a day after the bank announced its intention to sell its entire ownership stake at Charles Schwab Corp. worth about $20 billion.
“Doing any sort of M&A at this point would distract us,” Raymond Chun said on a conference call with analysts on Tuesday.
Instead, he aims to use a portion of the money from selling the Charles Schwab shares in a “targeted and value-driven manner to drive organic growth.” As an example, he said he wants “to deepen” TD’s relationship with its 14 million Canadian customers, which he described as the bank’s “single largest opportunity.”
It will also use $8 billion from the sale to repurchase up to 100 million shares.
TD on Monday said it is selling its stake in Texas-based Charles Schwab as part of a strategic review that was announced last year after it was fined $3.1 billion and ordered to cap the expansion of its U.S. retail banking business by United States regulators for failing to monitor money laundering activities at its branches.
The bank’s review, which is expected to be finished by the second half of the year, includes looking for ways to reallocate capital, optimize costs, simplify its portfolio and invest in new technology that can support organic growth, Chun said.
“Once we have a clear line of sight on these investments and have completed our current share buyback, if we have additional capital and depending on market conditions, we would consider further buybacks,” he said.
Chun said the bank decided to spend $8 billion out of the $20 billion it will receive from selling its stake in
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