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TD Bank reports Q3 loss as it takes US$2.6B charge on anti-money laundering probe

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TORONTO – TD Bank Group swung to a rare loss in its latest quarter as it took a US$2.6-billion charge related to ongoing U.S. investigations into its anti-money laundering program.

The charge led to a reported quarterly loss of $181 million, the first for the bank since 2003, but it also provided clarity on the expected total cost of the investigations after some speculation it could go even higher.

“The US$2.6-billion provision we just announced, combined with the US$450-million provision announced last quarter, represents our current estimate of the total fines to be paid related to these matters,” chief executive Bharat Masrani told financial analysts on a conference call Thursday to discuss the company’s latest results.

TD also added it expects a global resolution of the issues will be finalized by the end of the calendar year.

“While we are not through the tunnel yet, we can see the light at the end of this journey,” Masrani said.

The anti-money laundering investigation has been a major overhang for TD for some time. The investigation helped scuttle its US$13.4-billion acquisition of U.S. bank First Horizon Corp. in May last year, while the bank disclosed last August it expected U.S. regulators to impose penalties because of deficiencies in the program.

Earlier this year, the bank admitted serious deficiencies in its program after media reports that criminals had laundered at least US$653 million in proceeds from illicit drugs through the bank.

“As I’ve said before, the failures were serious,” Masrani said Thursday. “We own it, we know what the issues are and we are fixing them.”

The bank said the expected resolution will include both the monetary penalties it outlined, along with non-monetary ones. Analysts have been concerned those penalties could include restrictions on growing its balance sheet, but Masrani declined to provide any details on what non-monetary penalties could entail.

“You know, there might be compliance requirements, there can be various other requirements, hard to speculate. We are in the middle of this, negotiations, investigations, so we just want to make sure that we give you a fulsome disclosure when it’s appropriate.”

Along with announcing the provision, the bank said it had sold 40.5 million shares of the Charles Schwab Corp., worth about US$2.6 billion.

Analysts questioned the need for the sale, but Masrani said it was about keeping capital levels high.

“It’s prudent to have capital. There is still a lot of volatility and economic conditions are not as predictable as one would like.”

The need for capital came as the loss in its latest quarter stood in sharp contrast to a profit of $2.88 billion a year ago. The loss amounted to 14 cents per diluted share for the quarter ended July 31 compared with a profit of $1.53 per diluted share a year ago.

Revenue in the quarter totalled $14.18 billion, up from $12.91 billion a year ago.

On the credit question that will be a key focus for other banks, TD reported provisions for credit losses amounted to $1.07 billion, up from $766 million in the same quarter last year, though essentially flat from the previous quarter.

On an adjusted basis, TD said it earned $2.05 per diluted share in its latest quarter compared with an adjusted profit of $1.95 per diluted share in the same quarter last year.

The adjusted profit fell a little short of the $2.07 analysts on average had expected, according to LSEG Data & Analytics.

One of the big reasons for the miss was a big pullback in earnings from TD’s insurance unit because of extreme weather events.

Insurance earnings of $15 million were down significantly from the $145 million last quarter after it saw $186 million in claims during the quarter from the Toronto area flooding and the Alberta wildfires. The bank has also seen a rise in claims from hailstorms in Calgary and flooding in Montreal this month.

“We’ve seen an increase in the frequency of weather events,” said Masrani.

However, analysts were more focused on the anti-money laundering issue than the slight miss, noting the clarity is welcome.

“It doesn’t answer all the outstanding questions, but it does provide some important clarity on the ultimate timeline for a full resolution of the bank’s U.S. AML issues, as well as a clearer picture of the total monetary penalty,” said Scotiabank analyst Meny Grauman in a note.

While the approximately US$3 billion in total penalties is at the upper end of some forecasts, Grauman noted that some were expecting as high as US$4 billion.

He said the real issue in his view are the potential non-monetary penalties and the lack of details on them, but he’s not as worried as the market.

“We continue to believe that the market is pricing in a worst-case scenario that does not really have a precedent.”

National Bank analyst Gabriel Dechaine said the bank’s long-term outlook is challenged by the potential restrictions on U.S. asset growth, along with a multi-year increase to compliance costs.

He said the clarity on the total monetary penalties removes an overhang on the bank, while also clearing the way for a potential CEO succession.

“CEO succession at TD would have been topical if only because current chief Bharat Masrani has been at the helm for a decade. Succession questions have become even more intense because of the bank’s U.S. regulatory issues.”

Investors will have to wait longer to find out the full fallout from the affair, but Masrani said he’s keen to lay out the full picture.

“I look forward to providing additional clarity as soon as I can.”

This report by The Canadian Press was first published Aug. 22, 2024.

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Under-20 coach Cindy Tye named interim coach for upcoming Canada senior friendlies

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Canadian under-20 coach Cindy Tye will serve as interim coach for Canada’s upcoming women’s friendlies against Iceland and South Korea.

Canada Soccer has said head coach Bev Priestman will not be returning in the wake of the recent independent report into the Olympic drone-spying scandal. Priestman, assistant coach Jasmine Mander and analyst Joey Lombardi are currently serving one-year suspensions from FIFA, with Lombardi having already resigned his Canada Soccer position.

Tye a former Canadian international who doubles as associate athletic director and women’s head coach at Dalhousie University, will be joined by returning assistant coach Neil Wood. The rest of the staff consists of Katie Collar (interim assistant coach), Jen Herst (incumbent goalkeeper and set play coach) and Maryse Bard-Martel (interim performance analyst).

Canada Soccer said assistant coach Andy Spence, who ran the team during the Olympics and last month’s 1-1 draw with third-ranked Spain, is “unavailable for this camp and is scheduled to return for the next FIFA window.”

Spence has not talked to the media since the Olympics.

Former Canadian international Diana Matheson, now chief growth officer of the new Northern Super League, and Collar, head coach of Vancouver Whitecaps FC Girls Elite, were added to the staff for the game against Spain and served as the team’s spokeswomen with the media.

The sixth-ranked Canadian women will face No. 13 Iceland on Nov. 29 and No. 19 South Korea on Dec. 3, with both games at the Pinatar Arena in Murcia, Spain.

The 23-player squad features some of Tye’s under-20 charges, including North Carolina State University defender Janet Okeke and SMU forward Nyah Rose who receive their first senior call-ups 

Okeke, an 18-year-old from Laval, Que., and Rose, a 19-year-old from Markham, Ont., both represented Canada at the FIFA U-20 Women’s World Cup in September in Colombia. Jade Rose, Nyah’s older sister, has already won 26 senior caps but the 21-year-old Harvard University defender misses the Spain trip through injury. 

There are also second call-ups for 18-year-old midfielder Jeneva Hernandez Gray from the Vancouver Whitecaps FC Girls elite team and 28-year-old defender Megan Reid from the NWSL’s Angel City.

The FIFA window, which runs Nov. 25 to Dec. 3, marks Canada’s final camp of the year, with North American-based players entering their off-season and European-based players returning to club competition. 

Canada has played Iceland twice before, both at the Algarve Cup, with the teams playing to a scoreless draw in February 2019 and Canada winning 1-0 in March 2016.

The Canadian women are 7-1-1 all-time against South Korea and are unbeaten in their last five meetings. The teams drew 0-0 last time they met, in June 2022 in Toronto.

The roster announced Thursday has an average age of 23.

Kadeisha Buchanan, Sydney Collins, Cloé Lacasse and Quinn are also unavailable due to injury with Chelsea’s Buchanan the latest to go down, injuring her anterior cruciate ligament with England’s Chelsea. Canada Soccer said Seattle Reign forward Jordyn Huitema was unavailable due to personal reasons. 

Earlier this month Nyah Rose was named to the Atlantic Coast Conference’s third-all-star team, the first Mustang in program history to earn All-ACC honours. 

Rose led the American Athletic Conference with 11 goals as a freshman before SMU moved to the ACC.

She scored five goals in 11 games last season, missing five matches early due to international duty with the Canadian U-20 team. Rose scored Canada’s first tournament goal against France in a 3-3 draw and had seven shots on goal in the 9-0 rout of Fiji.

Earlier this year, Rose was one of only three sophomores named to the 44-player 2024 Hermann Trophy Watch List. The MAC Hermann Trophy honours the top NCAA soccer player.

There is another Rose on the team — Leicester City forward Deanne Rose, no relation.

Okeke played in 11 games for North Carolina State this season.

Hernandez Gray was also part of the Canadian team at the U-20 World Cup in Colombia and led the Whitecaps Girls Elite side at the inaugural CONCACAF W Champions Cup. 

Reid, a California native whose mother was born in Canada, gave up soccer after playing at the University of Virginia to pursue a career as a paramedic. She then returned to the sport, joining the NWSL’s Angel City for the 2022 pre-season as a non-roster invitee.

She was rewarded in January with a new contract that runs through 2025. Reid’s play also earned her an invitation in February to Canada’s camp in San Antonio ahead of the CONCACAF W Gold Cup.

 

Canada Roster

Goalkeepers: Sabrina D’Angelo, Aston Villa (England); Lysianne Proulx, Juventus (Italy); Kailen Sheridan, San Diego Wave (NWLS).

Defenders: Gabrielle Carle, Washington Spirit (NWSL); Vanessa Gilles, Olympique Lyonnais (France); Ashley Lawrence, Chelsea (England); Janet Okeke, North Carolina State (NCAA); Megan Reid, Angel City (NWSL); Jayde Riviere, Manchester United (England); Shelina Zadorsky, West Ham (England).

Midfielders: Marie-Yasmine Alidou, Benfica (Portugal); Simi Awujo, Manchester United (England); Jessie Fleming, Portland Thorns (NWSL); Julia Grosso, Chicago Red Stars (NWSL); Jeneva Hernandez Gray, Vancouver Whitecaps; Emma Regan, HB Køge (Denmark). 

Forwards: Janine Beckie, Racing Louisville (NWSL); Adriana Leon, Aston Villa (England); Nichelle Prince, Kansas City Current (NWSL); Deanne Rose, Leicester City (NWSL); Nyah Rose, Southern Methodist University (NCAA); Olivia Smith, Liverpool (England); Evelyne Viens, AS Roma (Italy). 

Follow @NeilMDavidson on X platform 

This report by The Canadian Press was first published Nov. 21, 2024.



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Toronto woman, 30, charged in death of her four-month-old baby: police

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TORONTO – A Toronto woman has been charged in the death of her four-month-old after the child was reported missing on Wednesday.

Toronto police allege the father reported the baby was missing shortly before 11:30 a.m. at a residential building in the city’s midtown.

They say officers responded to the scene, found the infant and made attempts to save the child’s life.

They say the baby was rushed to hospital and pronounced dead.

Police say the mother, 30, has been charged with failure to provide the necessities of life. 

They say she was scheduled to appear in a Toronto bail court on Thursday.

This report by The Canadian Press was first published Nov. 21, 2024. 

The Canadian Press. All rights reserved.



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Former Saskatchewan Party legislature member sentenced to probation for assault

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MOOSE JAW, Sask. – A former Saskatchewan Party legislature member has been sentenced to 12 months probation after pleading guilty to assault. 

Gregory Lawrence also faced a charge of assault by choking but it was dropped following the plea in court Wednesday in Moose Jaw, Sask.

A court document says Lawrence shoved and choked a woman during an argument in 2019.

As part of his probation, Lawrence is barred from contacting the victim and going within 50 metres of her home or workplace.

Lawrence resigned from the governing Saskatchewan Party caucus in January as police investigated complaints against him.

He represented the constituency of Moose Jaw Wakamow until October and did not seek re-election.

This report by The Canadian Press was first published Nov. 21, 2024.

The Canadian Press. All rights reserved.



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