Toronto-Dominion Bank has recently made a provision of US$450 million concerning investigations into its anti-money laundering measures by US authorities. The bank anticipates additional penalties in connection with the investigations.
The disclosure of the charge was made by Canada’s second-largest bank in a statement released after the close of markets. However, it has cautioned that the full extent of the fines it may incur is uncertain and cannot be reliably estimated at this time.
Toronto-Dominion is currently engaged in discussions with three US regulators and the Department of Justice to resolve the matter. The provision of US$450 million relates specifically to discussions with one of these regulators.
Financial analysts had previously speculated that the bank might face fines ranging from US$500 million to over US$1 billion. The recent announcement, however, has not provided significant clarity on the situation.
According to Jefferies Financial analyst John Aiken, the provision announced is not a definitive amount, and the timeline for resolving the issue remains uncertain. He noted that previous cases have taken several years for banks to fully resolve under consent orders.
Toronto-Dominion acknowledged in its statement that its anti-money laundering program had been inadequate to effectively monitor and respond to suspicious activities. The bank assured stakeholders of its financial strength and commitment to rectifying these deficiencies.
The bank’s attempt to acquire First Horizon Corp was terminated nearly a year ago due to regulatory approval issues. While Toronto-Dominion has expressed confidence in its ability to address the problem, it has refrained from providing further details.
The bank’s stock has experienced fluctuations amid concerns over potential regulatory restrictions and fines. Despite this, Toronto-Dominion remains dedicated to enhancing its risk management and control systems, particularly in the United States.
The announcement of the charge was made as part of a regulatory filing covering the first quarter of the year. The bank’s financial second-quarter results are expected to be reported on May 23.
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