Toronto Dominion Bank (TD) will be winding down a $3 billion investment portfolio while downsizing its headcount in a move to cut costs.
In TD’s latest earnings call, senior vice president and chief financial officer Kelvin Tran says the bank has undertaken a restructuring program to reduce structural costs and “create capacity to invest to build the bank for the future.”
As a result of the agenda, Tran says that TD will have to lay off roughly 2,000 employees.
“We expect this will result in approximately 2% reduction to our workforce.
Whenever possible, we will look to achieve this through attrition, and we will redeploy talent in areas where we are accelerating our capabilities. Through this restructuring program and the strategic review more broadly, we are innovating to drive efficiency and structurally reduce the bank’s cost base.”
Raymond Chun, TD Bank group president and CEO, tells shareholders that the bank will be shutting down its $3 billion point-of-sale financing operations in the US, as part of its effort to focus on core businesses.
“We also communicated plans to wind down our US point-of-sale financing business, which services third-party retailers. This business is comprised of a series of bespoke arrangements with each retailer, which impacts its profitability and scalability.
Exiting this business is accretive to US retail ROE (return on equity) and free up capacity to invest in a proprietary bank card business. In addition, through the strategic review, we are identifying opportunities to innovate to drive efficiencies and operational excellence. We are structurally reducing costs across the bank by taking a disciplined look at our operations and processes to find opportunities to automate and to reengineer them.”
Last year, TD Bank’s American-based unit admitted to violating the Bank Secrecy Act and gave $1.8 billion to the Department of Justice and $1.3 billion to the Financial Crimes Enforcement Network (FinCEN).
Prosecutors say the bank failed to properly track trillions of dollars in transactions, making it easy for drug traffickers and other criminals to move huge sums of cash to notoriously risky countries.
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