TD Bank Says Earnings Growth ‘Challenging’ Amid AML Remediation

TD Bank Group said Thursday (Dec. 5) that for the coming fiscal year, “it will be challenging for the Bank to generate earnings growth,” as it continues to work on its anti-money laundering (AML) remediation and invest in its business.

The bank said this in an earnings release in which it reported that during its fourth quarter, which ended Oct. 31, the reported net income of its Canadian banking business rose 9% year over year, while that of its U.S. banking business fell 32%.

“I remain confident in the earnings growth potential of our Canadian personal and commercial banking, wealth management, insurance and wholesale banking segments,” Chief Operating Officer Raymond Chun said Thursday during the bank’s quarterly earnings call. “And while we expect that the U.S. balance sheet restructuring and AML remediation will impact the U.S. retail segment, we remain committed to the U.S. market and confident in the strength of our franchise.”

Several U.S. regulators and authorities announced Oct. 10 that TD Bank Group and some of its U.S. subsidiaries consented to orders and entered into plea agreements related to previously disclosed investigations of its Bank Secrecy Act (BSA) and anti-money laundering (AML) programs.

The bank said on the same day that it takes full responsibility for the failures of its U.S. BSA and AML compliance programs and will work to remediate them.

In a presentation released Thursday in conjunction with its earnings call, TD Bank Group said it has overhauled its U.S. BSA/AML program leadership and talent, strengthened its oversight structure and accountability, introduced new standards for policy and risk assessment, enhanced its process and control, and deployed new data-driven technology solutions and the first phases of an enhanced transaction monitoring platform.

The AML remediation will be a multi-year process, Bharat Masrani, group president and CEO of TD Bank Group, said during the earnings call.

“We expect to have the majority of the management remediation actions implemented by the end of calendar 2025, with additional management actions planned for calendar 2026,” Masrani said. “Remediation actions will then be subject to internal challenge and validation, including sustainability and testing activities, which are planned for calendar 2027, followed by review and acceptance by the monitorship. We will then work with our regulators to demonstrate the sustainability of our remediation actions.”

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