TORONTO — CEO of TD Bank Bharat Masrani expresses his hope to share more information soon about the investigation into the bank's measures to prevent illegal money activities.
Masrani commented on this as he addressed shareholders at the bank’s annual general meeting on Thursday, the first meeting since the bank's US$13.4-billion acquisition of First Horizon bank fell through, and it was revealed that the bank is likely to face penalties due to the investigation by U.S. regulators related to its anti-money-laundering program. anti-money-laundering program.
Masrani stated, “Unfortunately, our program was not as effective as it should have been. We are aware of our shortcomings and are working to address them.”
He acknowledged shareholders' desire for more information about the investigation, which involves the U.S. Department of Justice, but due to confidentiality requirements, he is unable to provide more details or speculate about when updates will be available.
“I hope that I will be able to provide more details in the near future, and I would be very pleased to do so at that time,” Masrani said.
“In the meantime, I ask for your patience.”
TD terminated the First Horizon deal in May last year due to uncertainties in timing, and in August, it disclosed its expectation of penalties from U.S. regulators.
On Thursday, Masrani also faced questions about the bank's share price performance, which has dropped by over 27 percent since reaching a high in February 2022.
He stated that the bank's fundamental performance is strong, but he admitted that the investigation has had a negative impact on the stock.
“Shareholders and we are undoubtedly anxious about our issues in the U.S., and there is likely pressure until there is more clarity,” he said.
Masrani emphasized that TD still has a significant presence and potential in the U.S., even without the acquisition, with more retail locations than in Canada, and nearly 80 percent of its retail deposits in the U.S. being in markets where it ranks as one of the top three banks.
The bank also faced inquiries about its efforts related to climate issues, including its lobbying affiliations and direct actions to reduce emissions.
A shareholder resolution presented by Investors for Paris Compliance, urging the bank to provide more information on how it intends to achieve its net zero targets, received 28.6 percent support, up from 23.5 percent for a similar resolution last year.
Kyra Bell-Pasht, director of research and policy at Investors for Paris Compliance, mentioned that the increasing support indicates shareholders' ongoing concerns about the bank's management of its growing climate transition risk.
“As the climate crisis intensifies, investor pressure for accountability from the bank will only increase,” she remarked.
- TD Bank and First Horizon abandon US$13.4-billion deal
- TD describes money-laundering investigation as 'manageable'
A proposal for an advisory vote on environmental policies, presented by Le Mouvement d’education et de defense des actionnaires, received 17.9 percent support.
Climate issues received the most support out of shareholder resolutions, including nearly 29 percent support for a proposal to have TD provide more details on its transition plans, and 18 percent support for an advisory vote on environmental policies.
