“The bank is cooperating with such authorities and is pursuing efforts to enhance its Bank Secrecy Act/anti-money-laundering compliance programme,” the Toronto-based business said. “The bank anticipates monetary and/or non-monetary penalties to be imposed,” the statement reads, “although the ultimate results of these inquiries and investigations are unknown at this time.”
A Justice Department official declined to comment. Toronto-During a conference call with investors, Dominion executives didn’t go into further detail about the nature of the probe.
In Toronto, shares of the bank ended lower by 3.1%.
A merger between Toronto-Dominion and First Horizon Corp., a company based in Tennessee, fell through in May after the bank claimed it was unable to obtain timely approval from authorities. Concerns over Toronto-Dominion’s handling of suspicious customer transactions delayed the acquisition, a person with knowledge of the situation told Bloomberg News at the time. According to the source, the regulators’ worries centred on anti-money-laundering procedures.
Lessening Shares of Toronto-Dominion as Earnings Are Hurt by Deposit Costs
Even though the $13.4 billion acquisition had appeared precarious since early March, when the Memphis-based lender reported that Toronto-Dominion had said it didn’t feel it could get regulators to sign off by a May 27 deadline, the decision to walk away from the deal nonetheless surprised the markets. It would have added more than 400 bank branches in the US Southeast, making it Toronto-Dominion’s biggest purchase ever.
Toronto-According to Gabriel Dechaine, an analyst at National Bank of Canada, Dominion could “easily afford to pay” any fines resulting from the probes it recently disclosed.
However, we think that the possible reputational damage, as well as potential increases in compliance costs and capital requirements (via greater operational RWA), are crucial factors to take into account.