TD sells US$15 billion in Schwab shares as it looks to boost its balance sheet
Toronto-Dominion Bank is selling its entire ownership stake in Charles Schwab Corp. as it takes a major step towards reallocating its capital after being sanctioned by United States regulators last year for failing to prevent money laundering at its branches.
The bank on Monday said it intends to sell about 184.7 million shares of the Texas-based financial company’s common stock, or about 10.1 per cent of economic ownership. Analysts expect the move to free up at least $20 billion for TD, of which $8 billion will be used to repurchase up to 100 million shares, TD said.
“As part of our strategic review, we have been evaluating capital allocation and have made the decision to exit our Schwab investment,” TD chief executive Raymond Chun said in a statement. “We are very pleased with the strong return we are generating on the Schwab shares we acquired in 2020.”
The bank also will use the money to “further support” its “customers and clients, drive performance and accelerate organic growth,” he said.
In December, TD suspended its medium-term financial targets and said it would conduct a review of its strategies after it was fined $3.1 billion and ordered to cap the expansion of its U.S. retail banking business by U.S. regulators. It hopes to provide new financial targets in the second half of 2025 after its strategic review is completed.
TD had already lowered its ownership in Schwab to 10.1 per cent in August 2024 from 13.5 per cent in August 2022 as it anticipated getting hit with fines due to the anti-money laundering charges. As such, its decision to sell the remainder didn’t surprise analysts following the bank.
“Overall, we view this transaction favourably,” Canaccord Genuity Corp. analyst Matthew Lee said in a note on
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