By Nivedita Balu
TORONTO (Reuters) -TD Bank on Monday reinstated its medium-term growth target which it suspended in December, as it recovered from a $3 billion fine in the U.S. for anti-money laundering failures and laid out a strategy to focus on fee-based businesses.
CEO Raymond Chun outlined a growth plan at the bank’s investor day, his first since he took charge in February and the bank’s first since it pleaded guilty to multiple U.S. money laundering charges.
The plan included a focus on high-fee businesses such as wholesale banking and wealth management, as well as the addition of more wealth management advisers, U.S. retail financial advisers and investment specialists. It also plans to cut costs and achieve up to C$2.5 billion ($1.80 billion) in annual savings through restructuring programs, AI and technology.
The money laundering case hurt growth at the bank, which has been competing with peers for a share of the U.S. and domestic markets.
Chun acknowledged the bank’s underperformance on growth. “That’s unacceptable. And that’s changing,” he told shareholders.
Chun has prioritized restructuring TD’s balance sheet, including by selling its stake in Charles Schwab and deploying C$8 billion toward a share buyback program. TD announced on Monday that it plans to initiate a new buyback of about C$6 billion to C$7 billion.
TD’s shares in Toronto fell at mid-day after the plan was announced but recovered late in the session to trade marginally higher. The shares have risen 44% so far this year, surpassing all of its Canadian peers and recovering from a 10% slump in 2024.
“They haven’t shown me anything new… I don’t think investors got that much excitement from Chun’s team,” said Michael Dehal, a senior portfolio manager at Dehal Investment Partners at Raymond James which holds TD shares for clients.
Chun said the bank’s branch network, a big part of TD’s strength, will continue to be a major competitive advantage.
“But we need to reshape the role of a branch in the digital era. We’re transforming branches from transaction hubs to high-value advice centers,” he said.
That will include leaner and advice-driven staff and more self-service for everyday activities.
The bank still has room to grow in the U.S., he said, despite a $434 billion asset cap imposed along with the fine.
“We’ve restructured our U.S. balance sheet to build capacity for growth.”
($1 = 1.3913 Canadian dollars)
(Reporting by Nivedita Balu in Toronto and Arasu Kannagi Basil in Bengaluru; Editing by Caroline Stauffer and Edmund Klamann)
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