TD Bank has announced its decision to divest its 10.1% stake in Charles Schwab, an investment firm, for approximately C$20 billion (US$14.6 billion) after taxes.
The bank plans to allocate C$8 billion of the proceeds towards share buybacks, while the remaining funds will be reinvested into its Canadian operations to stimulate organic growth.
This sale follows a comprehensive strategic review at TD Bank, which came after the institution faced penalties exceeding $3 billion for violations of US anti-money laundering laws. The bank is also dealing with restrictions on the expansion of its US retail banking sector, which could hinder its earnings potential.
This transaction marks the first significant action undertaken by the newly appointed CEO, Raymond Chun, who stepped into the role this month after the retirement of Bharat Masrani, who served for a decade and departed following the US settlement.