Some analysts are warning the money laundering penalties levied against Toronto-Dominion Bank this week by U.S. regulators could weigh on the bank’s stock price long-term.
On Thursday, TD agreed to pay fines totalling about US$3.09 billion after pleading guilty to multiple charges related to failings in the bank’s anti-money laundering program.
Regulators also imposed non-monetary sanctions in the form of an asset cap that puts limits on TD’s ability to grow in the U.S.
National Bank of Canada analyst Gabriel Dechaine said in a research note Friday that the term “non-monetary” is misleading since an imposed cap on assets of TD’s main U.S. subsidiaries could have significant financial implications for the company.
He pointed out TD’s personal and commercial banking operations in the U.S. have accounted for 30 per cent of TD’s total earnings over the past year.
TD’s share price was down 2.53 per cent in mid-morning trading on Friday on the Toronto Stock Exchange, after tumbling more than five per cent Thursday after news of the penalties broke.
This report by The Canadian Press was first published Oct. 11, 2024.
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