Bulletin: Toronto-Dominion Bank's Sale Of Schwab Investment Boosts Capital In The Short Term; Usage Of Some Proceeds Is Uncertain

TORONTO (S&P Global Ratings) Feb. 12, 2025--S&P Global Ratings today said that Toronto-Dominion Bank's (TD Bank; A+/Stable/A-1) sale of its 10.1% stake in Charles Schwab Corp. will increase the bank's capital in the short term while uncertainty remains over usage of some of its proceeds. The sale is part of TD Bank's strategic review in an effort to rebalance business mix, improve productivity, and boost return on equity, in the aftermath of the asset cap imposed by regulators on two of its U.S. subsidiaries. The sale is expected to generate approximately C$20 billion of proceeds, of which about C$8 billion will be used for share repurchases over the next 12 months. Although we view the use of proceeds to partially

...February 12, 2025 TORONTO (S&P Global Ratings) Feb. 12, 2025--S&P Global Ratings today said that Toronto-Dominion Bank's (TD Bank; A+/Stable/A-1) sale of its 10.1% stake in Charles Schwab Corp. will increase the bank's capital in the short term while uncertainty remains over usage of some of its proceeds. The sale is part of TD Bank's strategic review in an effort to rebalance business mix, improve productivity, and boost return on equity, in the aftermath of the asset cap imposed by regulators on two of its U.S. subsidiaries. The sale is expected to generate approximately C$20 billion of proceeds, of which about C$8 billion will be used for share repurchases over the next 12 months. Although we view the use of proceeds to partially return capital as a credit negative, we believe this is neutralized by the boost in TD Bank's Common Equity Tier 1 (CET1) capital levels. At fourth-quarter 2024, the bank reported a CET1 ratio of 13.1% (peer average: 13.3%), but expects that, net of the share...

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