TD Bank Group reported a rise in fourth quarter profits after selling part of its Charles Schwab Corp. holdings, while its adjusted earnings dropped as it continued to grapple with the fallout from its anti-money laundering deficiencies.
The bank reported a profit of $3.64 billion, up from $2.87 billion in the same quarter last year, boosted by a $1.02-billion gain from the Schwab share sales.
Adjusted earnings were down eight per cent to $3.2 billion in what chief executive Bharat Masrani called a challenging quarter.
“A key development this quarter was the resolution of our U.S. AML matters, bringing important clarity to our stakeholders,” stated Masrani, who announced in the quarter that he would be retiring next April.
The bank said it will be challenging for it to generate earnings growth in the year ahead as it navigates a transition year, including all it needs to do to get its anti-money laundering systems up to standards.
As a result, it suspended its medium-term financial targets including earnings per share growth, return on equity and positive operating leverage and planned to provide updated targets in the second half of 2025.
“Our AML remediation is our top priority, and we remain focused on strengthening our risk and controls to meet our obligations,” said chief operating officer Raymond Chun, who is set to replace Masrani as CEO.
“I’m confident that in the year ahead, we will refresh our strategy, drive change, and enhance efficient execution to deliver for our shareholders and all stakeholders.”
The bank’s fourth-quarter profit amounted to $1.97 per diluted share for the quarter ended Oct. 31, up from $1.48 per diluted share a year earlier.
TD said it sold 40.5 million Schwab shares in August when it also announced it would take a provision related to U.S. investigations into its anti-money laundering program. The bank agreed in October to pay fines totalling more than $4.23 billion after pleading guilty to multiple charges related to its failings.
On an adjusted basis, TD says it earned $1.72 per diluted share in its latest quarter, down from an adjusted profit of $1.82 per diluted share a year earlier.
Analysts on average had expected an adjusted profit of $1.82 per share, according to data provided by LSEG Data & Analytics.
Revenue for the quarter totalled $15.51 billion, up from $13.18 billion in the same quarter last year, while TD’s provision for credit losses for the quarter totalled $1.11 billion, up from $878 million in its fourth quarter last year.