TORONTO – TD Bank Group has reported a $181 million loss for the quarter that ended on July 31 after it had to set aside $2.6 billion for expected fines by U.S. regulators because of problems with the bank’s anti-money laundering controls.
The Toronto-based bank, which has nine branches in Rhode Island and is the state’s seventh largest bank in terms of deposits, posted a $2.89 billion profit in the same quarter a year ago.
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The bank disclosed that it had sold part of its stake in the financial services company Charles Schwab.
“TD delivered record revenue and net income in Canadian Personal and Commercial Banking, continued operating momentum in the U.S., and strong results across our markets-driven businesses,” Bharat Masrani, CEO and group president of TD Bank Group, said in an earning statement on Aug. 22. “We continued to invest in new and innovative capabilities and expanded our product offerings to better serve our customers and clients.”
Total revenue reported for the three months that ended July 31 was $14.18 billion, up 9.8% from the $12.91 billion reported a year ago.
TD Bank’s U.S. retail group reported a net loss for the quarter of $1.66 billion, compared with reported net income of $977 million in the same quarter last year.
The bank said its U.S. retail group reported stable deposits and year-over-year loan growth, with commercial banking middle-market loan balances and lending fees growing 18% and 9% year over year, respectively.
“Looking ahead, TD is strong and well-positioned to navigate the macroeconomic environment, invest in both our [anti-money laundering] remediation program and our business, and continue to deepen our relationships with our nearly 28 million customers and clients,” Masrani said “I want to thank TD bankers around the globe for their hard work and commitment to the bank and those we serve.”
U.S. regulators are reportedly investigating allegations that Chinese drug traffickers laundered more than $650 million through the bank beginning in 2016.
In addition to the $2.6 billion provision made for expected fines, the bank had set aside an additional $450 million in April.
Perhaps to offset those costs, TD announced on Aug. 21 that it had sold 40.5 million shares of common stock of Schwab. The shares have been sold for proceeds of approximately $2.5 billion. The share sale will reduce the bank’s ownership interest in Schwab from 12.3% to 10.1%.
(Correction: An earlier version of this story gave an incorrect amount of net income reported by TD Bank’s U.S. retail group in the third quarter of 2023. It was $977 million.)
