Plans for the establishment of TD Bank's US division have reportedly encountered significant setbacks, as stated by the company's CEO.
In a recent appearance at a Scotiabank conference, TD Bank CEO Bharat Masrani acknowledged the bank's ongoing focus on addressing anti-money laundering (AML) issues. Masrani emphasized that fixing AML issues remains the bank's top priority.
The bank has been facing investigations by the U.S. Justice Department and several regulators, related to its U.S. AML program, due to an alleged scheme involving the laundering of at least $653 million tied to the drug fentanyl.
In response to these investigations, TD has invested in its risk and control infrastructure and hiring to address the AML issues. The bank has also set aside approximately $3.57 billion for estimated penalties and fines related to AML matters.
Masrani also mentioned the need to deepen accountabilities for various types of risk within the bank, from the front lines to the audit function. He emphasized the importance of coordinating and ensuring that the right information gets to the right staff and areas of the bank in real time.
Despite these challenges, TD had plans to open 150 U.S. branches by 2027, following the collapse of its proposed $13.4 billion acquisition of Memphis, Tennessee-based First Horizon. However, due to the AML issues, TD has slowed down its plans to open U.S. branches.
TD's U.S. CEO Leo Salom has addressed the effect of the AML probe on U.S. branch opening plans, but no further details have been provided. TD spokespeople did not immediately respond to questions about the updated number of branch openings in the U.S., or the number of employees facing potential compensation cuts due to AML issues.
TD serves approximately 10 million consumers through its U.S. unit. Last quarter's expenses at TD totaled $11 billion, due to AML remediation expenses. No new information about AML penalties or fines was provided in the latest updates.
Masrani acknowledged that in a bank of TD's size, it's sometimes necessary to look more closely at accountabilities than they have in the past. He expressed hope for a "global resolution" on the AML matters by the end of this year, but no further details were provided.
It is worth noting that TD has been focusing on branch closures in 2025, with numerous locations affected across multiple U.S. states due to a shift towards digital banking. The bank's focus on digital transformation and AI integration suggests a strategic move towards more efficient operations, possibly impacting branch strategies.
For comprehensive details on TD Bank's current expansion plans or any anti-money laundering issues, it would be necessary to consult the bank's official communications or relevant regulatory reports.
- The ongoing investigations by regulators concerning TD Bank's AML program, resulting from an alleged drug money laundering scheme, have led the bank to allocate approximately $3.57 billion for estimated penalties and fines.
- In response to the AML issues, TD Bank has slowed down its plans for opening new U.S. branches, despite earlier plans to open 150 branches by 2027.
