The Toronto-Dominion Bank TD

Toronto-Dominion Should See US Loan Growth Turn Positive in Fiscal 2026

Toronto-Dominion is the second-largest Canadian bank. Around 55% of its revenue is domestic and around 40% is from the US. We think new CEO Raymond Chun is putting the bank on the right track. 2025 was a transitional fiscal year as TD is actively remediating its US anti-money-laundering system with elevated expenses and repositioning its US balance sheet for its asset cap growth limitations. TD also sold its 10.1% equity stake in Charles Schwab in February of 2025, which gives the bank excess capital to cover the costs of the balance sheet optimization and conduct share buybacks. TD reduced its share count by 3.5% in fiscal 2025 through buybacks, and we expect the bank to reduce its share count by around 3.8% in fiscal 2026. Divesting Schwab shares also helps the bank sharpen its focus. The balance sheet growth limitation on TD’s US retail bank means that the company will have to grow its domestic businesses faster; we view this as a positive, because TD’s Canadian businesses are moatier.