The Toronto-Dominion Bank

The negative outlook reflects S&P Global Ratings' view of the potential headwinds for the bank from the demonstrated weaknesses in the bank's risk management and controls that failed to monitor, identify, and prevent money-laundering activity, including but not limited to possible regulatory fines. Lowering the long-term issuer credit ratings (ICRs) on TD Bank and core subsidiaries to 'A+' would result in our lowering the short-term ICRs to 'A-1'. The same amount of government support uplift would remain in place. We could lower our long- and short-term ICRs on TD Bank and its subsidiaries over the next two years if: Risk management and control issues prove to be wider in scope than what we believe them to be, if additional fines

...Ongoing AML investigations point to weaknesses in risk management and controls S&P Global Ratings believes ongoing investigations into The Toronto-Dominion Bank's (TD Bank) anti-money laundering (AML) practices point to weaknesses in the bank's risk management and controls. In May 2024, we revised our rating outlook on the bank to negative from stable due to weakened risk management and controls around AML. Although the bank initially provisioned US$450 million related to these deficiencies, we believe that the full financial impact and the extent of TD Bank's control issues, and how this weakness might affect the bank's future business and strategy, are uncertain. We expect NCOs will rise; however, sound underwriting will help limit losses. Elevated household debt and shrinking consumer savings, against the backdrop of higher interest rates, place TD Bank and its peers in a vulnerable position, given their large exposures to consumer lending. We expect that the slowing economy and weakening...

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