TD COO Happy with Underlying Fundamentals, PM Cautions Against Investment

TD Bank Group is expecting some tough times ahead when it comes to generating earnings in 2025, according to their recent quarterly report. Investors were disappointed by this outlook, especially with the small 3-cent increase in the fourth-quarter dividend.

After facing financial penalties of over $3 billion for charges related to anti-money laundering operations in the US, TD is still dealing with the fallout. Grant White, a portfolio manager and investment advisor, expressed caution about investing in TD right now. He emphasized that while the bank will likely recover eventually, it will take time to rebuild investor trust.

Despite these challenges, TD’s fourth-quarter results show that reported earnings were up 26.8% compared to the same period last year. Adjusted earnings were down 8.0%, but the bank remains focused on its core businesses and serving its customers. The resolution of the US AML matters is seen as a significant milestone, and the bank is prioritizing remediation efforts moving forward.

The bank has temporarily suspended its medium-term financial targets for EPS growth, return on equity, and positive operating leverage. These targets will be revisited in the second half of 2025. Raymond Chun, Chief Operating Officer at TD, expressed confidence in the bank’s ability to navigate the challenges ahead and deliver results for shareholders and stakeholders. It’s a turbulent time for TD, but with a strategic plan in place and a commitment to improving risk management and controls, the bank is working towards long-term success and stability.