TD Bank reports Q3 loss as it takes US$2.6B charge on anti-money laundering probe | Canada News Media
Connect with us

News

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

Published

 on

 

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.

Companies in this story: (TSX:TD)

Source link

Continue Reading

News

Bad traffic, changed plans: Toronto braces for uncertainty of its Taylor Swift Era

Published

 on

TORONTO – Will Taylor Swift bring chaos or do we all need to calm down?

It’s a question many Torontonians are asking this week as the city braces for the arrival of Swifties, the massive fan base of one of the world’s biggest pop stars.

Hundreds of thousands are expected to descend on the downtown core for the singer’s six concerts which kick off Thursday at the Rogers Centre and run until Nov. 23.

And while their arrival will be a boon to tourism dollars — the city estimates more than $282 million in economic impact — some worry it could worsen Toronto’s gridlock by clogging streets that already come to a standstill during rush hour.

Swift’s shows are set to collide with sports events at the nearby Scotiabank Arena, including a Raptors game on Friday and a Leafs game on Saturday.

Some residents and local businesses have already adjusted their plans to avoid the area and its planned road closures.

Aahil Dayani says he and some friends intended to throw a birthday bash for one of their pals until they realized it would overlap with the concerts.

“Something as simple as getting together and having dinner is now thrown out the window,” he said.

Dayani says the group rescheduled the gathering for after Swift leaves town. In the meantime, he plans to hunker down at his Toronto residence.

“Her coming into town has kind of changed up my social life,” he added.

“We’re pretty much just not doing anything.”

Max Sinclair, chief executive and founder of A.I. technology firm Ecomtent, suggested his employees avoid the company’s downtown offices on concert days, saying he doesn’t see the point in forcing people to endure potential traffic jams.

“It’s going to be less productive for us, and it’s going to be just a pain for everyone, so it’s easier to avoid it,” Sinclair said.

“We’re a hybrid company, so we can be flexible. It just makes sense.”

Swift’s concerts are the latest pop culture moment to draw attention to Toronto’s notoriously disastrous daily commute.

In June, One Direction singer Niall Horan uploaded a social media video of himself walking through traffic to reach the venue for his concert.

“Traffic’s too bad in Toronto, so we’re walking to the venue,” he wrote in the post.

Toronto Transit Commission spokesperson Stuart Green says the public agency has been working for more than a year on plans to ease the pressure of so many Swifties in one confined area.

“We are preparing for something that would be akin to maybe the Beatles coming in the ‘60s,” he said.

Dozens of buses and streetcars have been added to transit routes around the stadium, and the TTC has consulted the city on potential emergency scenarios.

Green will be part of a command centre operated by the City of Toronto and staffed by Toronto police leaders, emergency services and others who have handled massive gatherings including the Raptors’ NBA championship parade in 2019.

“There may be some who will say we’re over-preparing, and that’s fair,” Green said.

“But we know based on what’s happened in other places, better to be over-prepared than under-prepared.”

Metrolinx, the agency for Ontario’s GO Transit system, has also added extra trips and extended hours in some regions to accommodate fans looking to travel home.

A day before Swift’s first performance, the city began clearing out tents belonging to homeless people near the venue. The city said two people were offered space in a shelter.

“As the area around Rogers Centre is expected to receive a high volume of foot traffic in the coming days, this area has been prioritized for outreach work to ensure the safety of individuals in encampments, other residents, businesses and visitors — as is standard for large-scale events,” city spokesperson Russell Baker said in a statement.

Homeless advocate Diana Chan McNally questioned whether money and optics were behind the measure.

“People (in the area) are already in close proximity to concerts, sports games, and other events that generate massive amounts of traffic — that’s nothing new,” she said in a statement.

“If people were offered and willingly accepted a shelter space, free of coercion, I support that fully — that’s how it should happen.”

This report by The Canadian Press was first published Nov. 13, 2024.



Source link

Continue Reading

News

‘It’s literally incredible’: Swifties line up for merch ahead of Toronto concerts

Published

 on

TORONTO – Hundreds of Taylor Swift fans lined up outside the gates of Toronto’s Rogers Centre Wednesday, with hopes of snagging some of the pop star’s merchandise on the eve of the first of her six sold-out shows in the city.

Swift is slated to perform at the venue from Thursday to Saturday, and the following week from Nov. 21 to Nov. 23, with concert merchandise available for sale on some non-show days.

Swifties were all smiles as they left the merch shop, their arms full of sweaters and posters bearing pictures of the star and her Eras Tour logo.

Among them was Zoe Haronitis, 22, who said she waited in line for about two hours to get $300 worth of merchandise, including some apparel for her friends.

Haronitis endured the autumn cold and the hefty price tag even though she hasn’t secured a concert ticket. She said she’s hunting down a resale ticket and plans to spend up to $600.

“I haven’t really budgeted anything,” Haronitis said. “I don’t care how much money I spent. That was kind of my mindset.”

The megastar’s merchandise costs up to $115 for a sweater, and $30 for tote bags and other accessories.

Rachel Renwick, 28, also waited a couple of hours in line for merchandise, but only spent about $70 after learning that a coveted blue sweater and a crewneck had been snatched up by other eager fans before she got to the shop. She had been prepared to spend much more, she said.

“The two prized items sold out. I think a lot more damage would have been done,” Renwick said, adding she’s still determined to buy a sweater at a later date.

Renwick estimated she’s spent about $500 in total on “all-things Eras Tour,” including her concert outfit and merchandise.

The long queue for Swift merch is just a snapshot of what the city will see in the coming days. It’s estimated that up to 500,000 visitors from outside Toronto will be in town during the concert period.

Tens of thousands more are also expected to attend Taylgate’24, an unofficial Swiftie fan event scheduled to be held at the nearby Metro Toronto Convention Centre.

Meanwhile, Destination Toronto has said it anticipates the economic impact of the Eras Tour could grow to $282 million as the money continues to circulate.

But for fans like Haronitis, the experience in Toronto comes down to the Swiftie community. Knowing that Swift is going to be in the city for six shows and seeing hundreds gather just for merchandise is “awesome,” she said.

Even though Haronitis hasn’t officially bought her ticket yet, she said she’s excited to see the megastar.

“It’s literally incredible.”

This report by The Canadian Press was first published Nov. 13, 2024.

The Canadian Press. All rights reserved.



Source link

Continue Reading

News

Via Rail seeks judicial review on CN’s speed restrictions

Published

 on

OTTAWA – Via Rail is asking for a judicial review on the reasons why Canadian National Railway Co. has imposed speed restrictions on its new passenger trains.

The Crown corporation says it is seeking the review from the Federal Court after many attempts at dialogue with the company did not yield valid reasoning for the change.

It says the restrictions imposed last month are causing daily delays on Via Rail’s Québec City-Windsor corridor, affecting thousands of passengers and damaging Via Rail’s reputation with travellers.

CN says in a statement that it imposed the restrictions at rail crossings given the industry’s experience and known risks associated with similar trains.

The company says Via has asked the courts to weigh in even though Via has agreed to buy the equipment needed to permanently fix the issues.

Via said in October that no incidents at level crossings have been reported in the two years since it put 16 Siemens Venture trains into operation.

This report by The Canadian Press was first published Nov. 13, 2024.

Companies in this story: (TSX:CN)

The Canadian Press. All rights reserved.



Source link

Continue Reading

Trending

Exit mobile version