Canada's TD Bank to exit Charles Schwab stake for about USD 14.6 billion

At the moment, TD holds 184.7 million shares in Charles Schwab, out of which it will sell 165.4 million shares at USD 79.25 apiece for about USD 13.1 billion, at a discount of nearly 5% from Schwab's closing price.

According to Reuters, Schwab is set to purchase the remaining shares from TD for USD 1.5 billion.

More information on the announcement

US regulators hit TD with an asset cap of USD 434 billion that limits growth in the region of the US, a core market it had focused on for over a decade, and multiple other restrictions for money laundering failures. In addition, the bank is expected to use USD 5.5 billion of the proceeds for share buybacks, as well as invest the rest in performance and organic development.

After the review is completed and revealed, it will be seen whether this initiative will set TD up for a different strategy in US wealth management or not.

Back in October 2024, TD Bank agreed to pay USD 3 billion in money laundering settlement, pleading guilty to criminal charges that are related to money laundering in the region of the US. The line followed TD Bank’s failure to appropriately monitor money laundering by drug cartels and other criminals, a process which allowed them to transfer hundreds of millions of dollars in unlawful funds. In addition, the bank did not enforce sufficient defenses against money laundering (ML) for nearly 10 years and did not act when staff members flagged cases of abuse, including a customer making daily deposits of USD 1 million in cash.