Toronto-Dominion Bank: Firm May Face Billions in Anti-Money-Laundering Fines and Other Restrictions

The Wall Street Journal reported that wide-moat-rated Toronto-Dominion Bank will face around USD 3 billion, or about CAD 4.15 billion, in penalties for its failure to have proper anti-money-laundering practices in place in its US operations. As part of the settlement, regulators are also expected to place an asset cap on the firm’s US business. Despite the size of such a settlement, we do not expect to materially alter our CAD 88/USD 64 fair value estimate for Toronto-Dominion as the amount of the fine roughly matches what was already included in our projections. That said, we still see the shares as roughly fairly valued, despite the market’s negative response to the Oct. 10 news.