TD Bank misses expectations after US$2.6-billion hit from U.S. investigation
Toronto-Dominion Bank missed analysts’ estimates as wealth-management results underperformed expectations and the company took a restructuring charge related to job cuts, adding to the firm’s troubles as it also booked a new US$2.6 billion provision for fines tied to U.S. money-laundering investigations.
Canada’s second-largest lender earned $2.05 a share on an adjusted basis in the fiscal third quarter, according to a statement Thursday, falling short of the $2.07 average estimate of analysts in a Bloomberg survey. Toronto-Dominion, the first of the big Canadian banks to report results this quarter, incurred $110 million of charges for restructuring in the three months through July.
The charges — primarily related to employee severance, other personnel-related costs and real estate — come after Toronto-Dominion announced that it expects to pay a total of more than US$3 billion in penalties related to U.S. compliance lapses. It said it expects to finalize a “global resolution” by the end of the year and sold some of its stake in Charles Schwab Corp. to fund the latest provision, which followed an earlier charge of US$450 million, announced in April.
Toronto-Dominion faces allegations that it failed to catch money laundering and other financial crimes at several U.S. branches, with prosecutors having filed at least four cases in New York, New Jersey and Florida. It’s under investigation by the Department of Justice, financial regulators and the Treasury Department.
The news provides some clarity on the time line of a resolution as well as the amount of fines the bank may pay, which is at the high end of many analysts’ projections. But the big unknown remains what type of non-monetary restrictions Toronto-Dominion will be
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