TD Bank Group to sell remaining 10.1% stake in Charles Schwab

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TD Bank Group plans to sell its 10.1 per cent stake in the Charles Schwab Corp. as it continues work to recover from the fallout of its anti-money laundering failures in the United States.

Under the plan announced Monday, TD will sell 184.7 million shares in the company.

Schwab shares closed at US$83.18 on the New York Stock Exchange on Friday, making the TD stake worth about US$15.4 billion.

TD Bank chief executive Raymond Chun says the bank plans to use C$8 billion of the proceeds to repurchase shares and plans to invest the balance of the proceeds in its businesses.

“We are confident in TD’s growth opportunities and long-term potential,” Chun said in a statement.

TD said it planned to buy back up to 100 million of its shares once the Schwab sale is complete.

Chun replaced Bharat Masrani as chief executive on Feb. 1, ahead of an earlier plan that would have seen him take over the top job on April 10.

The sale of the Schwab shares comes as TD conducts a strategic review, including an evaluation of its capital allocation.

Last year, TD agreed to pay fines totalling more than C$4.23 billion to U.S. regulators because of the anti-money laundering failures. It also faces an asset growth cap on its U.S. retail banking operations.

TD said Monday that Schwab has agreed to repurchase US$1.5 billion of the shares. The Canadian bank added it will continue to have a business relationship with Schwab through an insured deposit account agreement.

The sale of the shares Monday follows a decision last year by TD to sell 40.5 million shares of Schwab that was worth about US$2.6 billion at the time.

TD acquired the shares in 2020 as part of Schwab’s acquisition of TD Ameritrade.