TD Bank tops earnings estimates despite U.S. anti-money laundering probe
TD Bank on Thursday reported better than expected quarterly earnings helped by strength in Canada and its wealth management unit, even as its U.S segment struggled amid probes related to its anti-money laundering program.
TD, Canada’s second largest bank, said net income at home rose seven per cent. This was helped by loan growth and newcomers opening accounts as it increased focus on the segment through a partnership with India’s HDFC bank to attract customers, such as students moving to the country.
South of the border, the lender is facing a U.S. Department of Justice probe over its ties to a $653 million drug money-laundering case in New York and New Jersey related to illegal drug sales.
In the U.S, earnings fell 58 per cent as it set aside $450 million to cover potential fines for one of three regulatory probes on the issue and is anticipating more monetary penalties.
The U.S. typically brings in about a quarter to a third of TD’s profit after its rapid expansion over the past decade, acquiring smaller region banks on the east coast and southeast U.S. and building a network of 1,100 branches.
But after its proposed $13.4 billion acquisition of First Horizon was scrapped, TD said it would continue to focus on the U.S. market expanding brick by brick by opening about 150 branches.
“The way we look at it is that it (AML probe) is situation dependent. We may pace the store opening differently given these priorities but we have a very strong franchise,” CFO Kelvin Tran said in an interview.
“The US continues to be an important part for TD… we still believe in expanding stores and our footprint,” he said, adding that it has invested over $500 million in program remediation and platform enhancements.
TD said it is working
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