TD Bank Restructures Amid Guilty Plea

By Nivedita Balu

TORONTO (Reuters) – TD Bank announced its focus on restructuring its balance sheet for the 2025 fiscal year after pleading guilty to violating U.S. anti-money laundering laws and agreeing to pay $3 billion in penalties.

The bank became the largest in U.S. history to plead guilty to violations of the Bank Secrecy Act. Following significant growth in the U.S. retail market, TD must now narrow its operations due to a regulatory asset cap. With over 1,100 branches and nearly 10 million customers, TD is the 10th largest bank in the U.S.

BY THE NUMBERS

TD plans to reduce U.S. assets by about 10%, selling up to $50 billion in lower-yielding investment securities and reinvesting the proceeds. These changes may impact near-term net interest income and incur one-time costs as the bank adjusts its $1.5 billion investment portfolio. Additionally, a dedicated committee will monitor their anti-money laundering efforts in the U.S.

KEY QUOTES

Leo Salom, head of U.S. operations, stated, "We think of 2025 as a transition year… to create that asset capacity, to comply with the asset cap."

U.S. Attorney General Merrick Garland noted the bank prioritized profits over compliance. Ross Delston, a legal expert, highlighted the significance of the bank's issues related to its lax practices.

WHAT'S NEXT

The U.S. Department of Justice and Treasury Department’s Financial Crimes Enforcement Network will appoint a monitor to oversee TD's corrective actions. CEO Bharat Masrani is set to retire next year, passing leadership to Ray Chun, currently the head of Canadian banking operations.