TD Bank Group says it’s set to receive $20 billion from selling its stake in The Charles Schwab Corp. as it looks to shore up its scandal-hit share price and invest in growth.
A day after initially announcing the sale, the bank revealed it was selling the Schwab shares for US$79.25 each, which it says values the stock at about 19 times the investment broker’s expected earnings per share this year.
Raymond Chun, who took over as CEO of TD at the start of February, says the deal will help it invest in growth including significant opportunities in Canada.
He says anti-money laundering remediation efforts at the bank remain the priority, but as TD goes through a strategic review, it’s also looking for ways to simplify its holdings and chart a path forward.
TD is working to move past its failures to stop hundreds of millions of dollars of illicit drug proceeds being laundered through the bank, which led it to paying more than US$3 billion last year in penalties.
The bank says it plans to use about $8 billion from the sale of the Schwab to buy back shares and invest the rest in its business.