The news: TD Bank suspended its medium-term financial targets amid a strategic review under incoming CEO Raymond Chun, per Bloomberg.
How we got here: TD’s Q4 profits missed analyst estimates, per Investopedia. As we expected, this is largely because of its record $3 billion fine levied by US financial regulators for major anti-money-laundering-related violations.
What’s next for the bank: TD’s incoming CEO told analysts, “We are looking at our business mix, including profitability and risk-adjusted return on capital, and where we need to invest and divest to improve.”
The bank plans to provide updated guidance after the strategic review, with an investor day scheduled for late 2025.
Meanwhile, the bank is already in the process of shrinking its US assets by 10%, per Bloomberg.
Our take: TD’s step back in the US could present competitors with a potential growth opportunity.
Because of its divestment, it’ll likely lose some customers, who will be looking for a new place to invest, and business. Banks trying to acquire these customers need to understand why they chose TD Bank—e.g., were they young investors attracted by the partial stock ownership campaign? This research could inform campaigns about why your bank would be the best replacement.
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