Toronto-Dominion Bank (TD) has reduced its stake in U.S. financial services firm Charles Schwab (SCHW) as its latest earnings missed analyst expectations.
Canada’s second largest bank said it lowered its stake in Charles Schwab to 10.1% from 12.3% as it sets aside $2.6 billion U.S. to cover fines in the U.S. related to money laundering charges.
TD has been targeted by the U.S. Department of Justice, the U.S. Treasury Department and market regulators in America for failing to catch money laundering and other financial crimes at several of its U.S. branches.
The bank operates a network of about 1,200 branches in the U.S., primarily in the eastern part of the country.
In its earnings release, TD said it estimates that the fines it faces in the U.S. related to the money laundering scandal could total as much as $3 billion U.S.
In terms of its quarterly financial results, TD reported earnings per share (EPS) of $2.05 for what was its fiscal third quarter. That fell short of the $2.08 forecast among analysts.
However, revenue at the bank was better than anticipated in the latest quarter. TD reported sales of $$14.24 billion, which beat consensus forecasts that called for $12.69 billion.
The stock of TD has declined 5% so far this year and currently trades at $81.29 per share.
Charles Schwab’s stock fell 4% on news of TD selling down its stake in the company. Year-to-date, its stock is down 7% and trading at $62.30 U.S. per share.
