MJP –
TD Bank has been hammered hard by penalties related to its Anti-Money Laundering (AML) program, costing $2.6 billion.
According to the bank, it plans to sell a portion of its ownership in Charles Schwab and set aside an enormous $2.6 billion to pay the fine.
In anticipation of any fines stemming from continuing international anti-money laundering (AML) investigations, the lending institution has set aside more than $3 billion.
A provision of $450 million was made in April.
According to Bloomberg, the lender is expected to finalize the settlement of these investigations by year’s end. The fines that may be imposed could be monetary or non-monetary.
U.S. investigators are looking into claims that, from 2016 to 2021, Chinese drug traffickers laundered more than $650 million through TD Bank.
An employee of the bank who helped launder narcotics money is also allegedly under investigation for bribes.
SEE MORE –
Alarm Raised: 94 US Banks Identified as High-Risk Institutions
On a separate note, the lender has reduced its ownership in the US stockbroker Charles Schwab from 12.3% to 10.1% by selling 40.5 million shares.
After accounting for Wednesday’s closing price, the sale is worth $2.6 billion.
In a statement, TD CEO Bharat Masrani acknowledged the significant shortcomings in their U.S. AML program and emphasized the critical nature of the work needed to fulfill their obligations and responsibilities.
TD’s Anti-Money Laundering program in the United States has been enhanced.
Following Thursday’s announcement of the lender’s third-quarter earnings, Masrani and other officials will field questions from analysts.
The fact that the penalty is bigger than expected and the impact on capital mitigate the market’s assurance about its amount, according to Jefferies analyst John Aiken.
The announcement of the US regulatory probes came soon after TD scrapped its $13.4 billion acquisition of First Horizon, a regional bank in the US.
