TD Bank May Take Years to Address Regulators’ Concerns

TD Bank apparently won’t be allowed to undertake US acquisitions despite having capital.

Bloomberg reported Monday (May 15) that a Barclays analyst claimed the regulatory problems the bank had while trying to buy First Horizon Bank will prevent it from buying additional retail banks for three to five years.

“If what we’re hearing, the rumors coming out that the regulator didn’t allow them on First Horizon because of issues with regulator concerns, it’s not going to dissipate,” Barclays Head of Research (Canada) and Senior Analyst John Aiken said Monday in an interview with BNN Bloomberg Television. “It will take TD several years to not only change their systems but also show the regulator that they have changed. So, from our standpoint, that’s a multiple-year process.”

Aiken said TD Bank is “probably the safest bank right now” but cannot invest its billions of dollars of extra capital after the First Horizon acquisition fell through.

A week earlier, regulators halted TD Bank’s acquisition of First Horizon due to AML concerns.

The Wall Street Journal (WSJ) stated May 8 that the OCC and Federal Reserve were concerned about TD Bank’s handling of odd transactions and its timeliness in reporting suspicious activities.

The WSJ reported:

“TD works diligently to prevent criminals from using the bank for illegal activity, to strengthen its risk management programs on an ongoing basis, and to protect the interests of our customers, the bank and the financial system.”

On May 4, TD Bank and First Horizon announced that they had abandoned their $13.4 billion merger after TD informed First Horizon that it has no regulatory approval timeline.

The proposed merger in February 2022 would have established America’s sixth-largest bank.