TD Bank reestablishes its medium-term growth goal, emphasizing high-fee areas.

TD Bank Revives Growth Targets Following Recent Challenges

Toronto (Reuters) – On Monday, TD Bank announced it would revive its mid-term growth targets, which had been put on hold since December. This comes as the bank recovers from a substantial $3 billion fine in the U.S. related to its failure in preventing money laundering, emphasizing a shift toward fee-based businesses.

CEO Raymond Chun shared his growth strategy during the Bank Investors’ Day. He addressed the issues faced since taking charge in February, notably after the bank admitted to multiple charges related to money laundering in the U.S.

The focus of the plan is on high-value sectors like wholesale banking and asset management. This includes increasing the number of wealth management advisors, retail financial advisors in the U.S., and investment specialists. Additionally, the bank aims to cut costs through restructuring efforts, leveraging technology and AI, targeting savings of up to $2.5 billion.

The money laundering incident has had a notable impact on the bank’s growth as it competes in both U.S. and domestic markets.

Chun recognized the decline in the bank’s performance, stating, “It’s not acceptable, and it’s changing,” during his remarks to shareholders.

A key element of Chun’s priorities is the restructuring of TD’s balance sheet, which includes divesting its stake in Charles Schwab and initiating an $8 billion stock repurchase program. The bank announced it plans to start new buybacks, estimated between $6 billion and $7 billion.

Chun highlighted that the branch network, a significant strength for TD, remains a competitive edge. However, he underscored the need to adapt branches for the digital era. “We are transforming branches from transaction hubs to high-value advice centers,” he noted.

This transformation will involve more advisory-based staff and increased self-service options for everyday transactions.

In the U.S., despite facing an asset cap, there are still opportunities for growth, he said. “We have restructured our U.S. balance sheet to build our growth capabilities.”