Toronto-Dominion Bank has taken an initial provision of $450 million in connection with U.S.
Canada's second-largest bank disclosed the charge in a statement Tuesday after markets closed. It cautioned that the full cost of the fines it might eventually face is "unknown and not reliably estimable at this time."
Toronto-Dominion is
Analysts have previously estimated that the bank might ultimately face fines ranging from $500 million to $1 billion or more.
"TD's AML program was insufficient to effectively monitor, detect, report and respond to suspicious activity. Work has been underway to remedy these deficiencies," the bank said.
"TD is a strong institution with the capital, liquidity and capacity to fund the critical effort currently underway to strengthen its AML program, invest in the business and continue to serve its customers and clients with excellence."
Toronto-Dominion's deal to buy First Horizon Corp.in Memphis, Tennessee,
It has previously told investors it knows what the problem is and is working to fix it, but said it was unable to share further information. The stock tumbled for months as investors grew more concerned about whether it might face major restrictions on acquisitions and growth in the U.S., on top of a large fine — though it has gained ground in recent weeks. Shares of Toronto-Dominion have fallen 4.6% this year, which ranks it fifth among Canada's six largest bank's.
The lender is spending hundreds of millions of dollars to improve its risk and control systems in the U.S.
Toronto-Dominion said it announced the charge Tuesday because it earlier disclosed it in a U.S. regulatory filing known as a call report. That filing covers the first three months of the year and does not line up with the bank's fiscal second quarter, which ends today, with results due to be reported on May 23.
