During Toronto-Dominion Bank's (TD) annual general meeting last week, CEO Bharat Masrani asked investors to have patience regarding US regulators' investigation into the bank's anti-money laundering (AML) practices, now in its second year.
As reported by Banking Dive, Masrani admitted to AML compliance shortcomings and affirmed the bank's commitment to rectifying them while cooperating with authorities. "TD is focused on resolving the issues and cooperating with the authorities to resolve the matter," Masrani said. TD has appointed new AML leadership and engaged external consultants for guidance.
The AML issues came to light after TD terminated its proposed acquisition of First Horizon amid uncertainty regarding regulatory approval. TD paid First Horizon $200 million to back out of the transaction, and it faces potential penalties of between $500 million and $1 billion as a result of the pending AML probe.
Investors have also expressed anxiety about the lack of clarity regarding Masrani's successor. Masrani sought to assuage these concerns. "A bank of our size, scale and profile would have very robust succession plans — and we do," Masrani said. "Our board is very engaged, as would be other departments of the bank." However, the recent departure of a leading candidate for CEO has caused further uncertainty.
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This was quite disheartening to experience, yet I remain hopeful and vigilant to a glorious ROP.