TD Stock Sinks as Bank CEO Suspends Guidance

TD stock sank on Thursday as a result of investors’ disappointment with the lender’s decision to suspend guidance while it conducts a strategic review in response to its anti-money laundering settlement in the United States.

TD’s quarterly profit estimates were below expectations; however, this was almost a mere footnote in the pursuit of a narrative, as analysts were unable to identify TD’s objectives.

TD stock closed at $74.02 on Thursday, a 7.08 percent decline.

The strategic review, which will be conducted by the prospective CEO, Raymond Chun, is designed to be a comprehensive assessment of the bank’s operations and opportunities in the aftermath of the substantial penalties imposed by U.S. regulators for TD’s anti-money laundering inadequacies.

In October, the lender made history by becoming the largest bank in the United States to plead guilty to violating a federal law designed to prevent money laundering. As a result, the lender agreed to pay $3 billion in penalties.

Regulators in the United States have implemented a rare asset limit that has affected TD. The bank will dispose of up to $50 billion in low-yielding bonds and reinvest the proceeds, in addition to reducing its assets in the country by 10%.

The bank’s U.S. retail business reported an adjusted net income of C$1.10 billion ($782.70 million) in the quarter, a decrease of C$174 million from the previous year.

Analysts anticipate that TD stock may pursue strategies to enhance its competitiveness in the domestic market subsequent to the implementation of the U.S. asset limitation.

In the three months ending on October 31, the bank’s adjusted net income decreased from C$3.49 billion, or C$1.82 per share, a year earlier, to C$3.21 billion ($2.28 billion), or C$1.72 per share.

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