TD Bank Invests Over $500M to Overhaul AML Processes Amid Regulatory Scrutiny

TD Bank, Canada's second-largest lender, has disclosed that it has allocated more than C$500 million (approximately $365.4 million) towards rectifying its anti-money laundering (AML) processes. The investment was directed towards program remediation and platform enhancements aimed at addressing deficiencies that have drawn scrutiny from both US and Canadian regulators. Additionally, the bank has bolstered its AML capabilities by hiring professionals in the field and making substantial technological upgrades.

CEO Bharat Masrani emphasized the tangible improvements resulting from these efforts while acknowledging that more work lies ahead. Masrani stated, "Our efforts have resulted in tangible improvements, with more work ahead. We continue to cooperate closely with our regulators to accelerate our progress and meet our obligations."

TD Bank has faced regulatory scrutiny on multiple fronts regarding its AML compliance program, both domestically and in the United States. In response to a US Department of Justice investigation into allegations of the bank's involvement in facilitating money laundering by Chinese drug traffickers and crime groups, TD provisioned $450 million. Furthermore, the bank incurred a fine of $6.7 million from local regulator FINTRAC for various failures related to suspicious transaction reporting (STR) and financial crime compliance (FCC).

In light of these challenges, TD Bank announced a comprehensive overhaul of its AML program in the US and globally, indicating a proactive approach to addressing regulatory concerns. However, the market response to these developments was stark, with TD Bank's shares plummeting by 5.8% on Friday, reaching their lowest level in over three years.

By fLEXI tEAM