>Toronto-Dominion Bank expects to raise about $14 billion through the sale of its entire stake in Charles Schwab Corp. as part of a corporate overhaul in the wake of its historic US money-laundering settlement.
>Toronto-Dominion will sell 184.7 million shares of Schwab’s common stock, representing 10.1% economic ownership, it said in a statement Monday. Schwab has agreed to buy back $1.5 billion of its shares from TD.
>Canada’s second-largest bank reached a settlement in October with the US Department of Justice and bank regulators over its failure to catch money laundering at several American branches. Toronto-Dominion agreed to pay almost $3.1 billion in fines and other penalties and last month said it was accelerating its chief executive officer-transition process, tapping Raymond Chun to step into the role two months earlier than initially planned.
>“As part of our strategic review, we have been evaluating capital allocation and have made the decision to exit our Schwab investment,” Chun said in the statement.
>Toronto-Dominion expects to generate about $14 billion in proceeds through the share sale, Chun told bank employees in an internal memo Monday morning seen by Bloomberg. “In just under five years, this investment has generated a very strong return, and we believe this is the right time to reallocate the capital,” he said in the memo.
>The Canadian lender acquired its ownership stake in 2020 as part of a transaction to sell its interest in online brokerage TD Ameritrade Holding Corp. to Schwab. It sold 40.5 million Schwab shares in August, trimming its previous 12.3% stake to raise about $2.5 billion to help cover the cost of fines in the money-laundering probes.
>Toronto-Dominion said it plans to use C$8 billion of the proceeds to repurchase its stock, and will invest the balance of the proceeds in the company’s businesses.
>A representative for Schwab declined to comment, citing regulatory reasons.
>Chun has previously said Toronto-Dominion’s ownership of Schwab shares is separate from its agreement with the firm to make sweep-deposit accounts available to Schwab clients. With sweep programs, uninvested cash in brokerage accounts is automatically transferred into higher-interest accounts.
Link: [https://www.bloomberg.com/news/articles/2025-02-10/td-bank-plans-to-sell-its-entire-equity-investment-in-schwab](https://www.bloomberg.com/news/articles/2025-02-10/td-bank-plans-to-sell-its-entire-equity-investment-in-schwab)