(Toronto) TD Bank Group said it has taken a $2.6 billion provision in its third-quarter results, hoping for an early resolution to ongoing civil and criminal investigations into its anti-money laundering program.
The bank, which is due to release its third-quarter results on Thursday, said in a press release late Wednesday that it had taken the provision in anticipation of a resolution that will include sanctions.
“We recognize the seriousness of the shortcomings in our U.S. program, and the work required to meet our obligations and responsibilities is of critical importance to senior management, our boards and me,” Bharat Masrani, Group Chairman and CEO, said in the statement.
The bank also announced the sale of 40.5 million shares of Charles Schwab Corp., worth about $2.6 billion based on a closing price of $64.57. This reduces the bank’s stake in the company from 12.3% to 10.1%.
Mr Masrani said the bank recognises the seriousness of the shortcomings in its anti-money laundering programme.
“TD continues to work constructively with regulators and law enforcement officials to resolve the AML/CFT issues in the United States, and looks forward to providing further insight into these developments to our shareholders, customers and other stakeholders,” Masrani added in the press release.
The CEO also mentioned that the financial institution was working to strengthen its U.S. anti-money laundering program with the addition of “globally recognized leaders and talent from across the industry, including experts from regulatory agencies, law enforcement and government.”
The bank’s second-quarter profit was hit by an initial charge of $615 million, or $450 million. Its profit fell 22% year-over-year in the quarter.
Last August, the bank revealed that it expected US regulators to impose penalties over its anti-money laundering compliance program.
In early May, the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, imposed a $9.2 million penalty on TD for non-compliance with anti-money laundering and anti-terrorism financing measures.