A US bank has reportedly set aside another $2.6 billion as it prepares to pay a major fine to regulators.
TD Bank is under investigation over allegations that Chinese gangs relied on the lender to launder $650 million in illegal drug proceeds between 2016 and 2021.
Now the bank is preparing for a total resolution of the issue, Reuters reports, having set aside more than $3 billion in anticipation of the upcoming, unannounced fine.
To soften the impact, the bank is selling part of its stake in Charles Schwab.
Earlier this year, reports emerged that TD is in discussions with three US regulators, including the Department of Justice (DOJ), over its flawed AML program. In a statement to Reuters in May, the bank said its AML checks failed to flag the drug traffickers’ activities. A former bank employee is also accused of taking bribes to facilitate the transactions.
In its latest earnings news release, TD said it suffered losses of $181 million in the third quarter of this year due to the impact of civil and criminal investigations into its AML program. TD CEO Bharat Masrani says addressing the lender’s AML shortcomings is one of his top priorities.
“We recognize the seriousness of the shortcomings of our U.S. AML program and the work required to meet our obligations and responsibilities is of the utmost importance to me, our senior leaders and our boards of directors.
Our remediation program is in full swing. TD has strengthened its U.S. AML program with the addition of globally recognized leaders and talent from across the industry, including experts from regulatory agencies, law enforcement agencies and government agencies…
TD continues to work constructively with our regulators and law enforcement agencies to resolve our U.S. AML matters and looks forward to providing greater clarity to our shareholders, customers and other stakeholders.”
TD says it expects a global resolution to the regulatory investigations by the end of the year.
TD’s US arm, based in Wilmington, Delaware, has more than $370 billion in assets under management and is currently the tenth largest commercial bank in the US.
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