TD Bank re-investing in Canadian operations after US$14 billion Schwab sale
Toronto-Dominion Bank’s Canadian operations and capital markets franchise will be priorities under new chief executive Raymond Chun, who will soon have a stockpile of cash to spend after exiting the lender’s stake in Charles Schwab Corp.
The sale of TD’s 10.1 per cent interest in Schwab will net the Canadian bank US$13.9 billion after taxes and fees, executives said on an investor call Tuesday.
That works out to about $20 billion, and TD plans to put $8 billion of that toward share buybacks. The move takes advantage of its lower stock price, which sunk after sweeping United States probes into the bank’s failure to catch money laundering at several American branches. TD agreed to pay almost US$3.1 billion to settle those allegations in October and faces a cap on the size of its U.S. retail banking business.
TD shares rose as much as 0.9 per cent in Toronto, while Schwab rose as much as 2.4 per cent.
Against that backdrop, Chun said he’s looking for other places to deploy capital for organic growth, noting that pursuing acquisitions at this time would “distract” from TD’s primary goal of remediating its money-laundering controls.
“In Canada, the single largest opportunity for TD is to deepen our relationships with our more than 14 million customers. There are significant organic growth opportunities in Canada,” said Chun, who took over as CEO on Feb. 1.
TD’s investment bank is “undersized” and another place Chun plans to spend, he said. The lender closed its acquisition of U.S. investment bank Cowen Inc. in 2023 and doesn’t face limits on growing capital-markets or wealth-management services in the U.S.
The bank is also considering a fresh round of restructuring to bring down expenses, he said, adding that cost-cutting
Read more on financialpost.com
