The bank said so in its third-quarter report, when it announced a year-over-year decline in profit and a significant expansion of its share buyback program.

TD has received both formal and informal inquiries from regulators regarding its compliance program, the bank said in its report to shareholders. She responded generally and “with respect to specific US customers, counterparties or incidents, including as part of a US Department of Justice investigation,” the bank said.

Chief Executive Bharat Masrani said in a conference call Thursday on the results that the bank was working to step up its compliance efforts, but declined to reveal details of ongoing talks with regulators.

“We are working hard to improve our programs,” he responded to questions from analysts.

“We take this issue very seriously and are making the investments and improvements appropriate to our organization to manage the risk. I am confident that over time we will make the necessary improvements. »

The statement came after TD abandoned its plan to buy US-based First Horizon Bank for $13.4 billion in May, citing regulatory uncertainties. Media reported at the time that the bank’s anti-money laundering compliance program was a major sticking point for regulators.

TD Bank clarified in its filing that while the outcome of the regulatory investigations is unknown, it expects monetary or non-monetary penalties to be imposed.

declining profit

Along with the survey, the bank said Thursday that its net income was 2.96 billion, compared with 3.21 billion in the year-ago quarter, due to an increase in bad debt provisions and a rise in some related expenses is failure of First Horizon’s takeover bid.

The bank also announced a plan to buy back 90 million shares, or about 4.9% of its outstanding shares, after completing a 30 million share buyback program.

The program comes as the bank has additional funds for the First Horizon deal and questions remain about its growth plans after the deal fails.

Kelvin Tran, TD’s chief financial officer, said in an interview that the acquisitions are part of the bank’s consistent approach to capital allocation, which balances organic growth, acquisitions and returns to shareholders.

“This strategy depends on what is optimal at any given time, but we are very pleased to be able to do this by returning excess capital to shareholders,” he said.

The bank’s adjusted earnings per share for the most recent quarter were $1.99 per share, down from the adjusted earnings of $2.09 per share in the year-ago quarter.

Earnings came in below analysts’ median estimate of $2.04 per share, based on estimates by financial markets data firm Refinitiv.

The discrepancy was partly due to higher-than-expected loan loss provisions, which totaled 766 million compared with 351 million a year earlier, Barclays analyst John Aiken said.

The better-than-expected provisions are largely due to the bank’s extensive operations in the US, where results were also disappointing.

“The deficit is largely due to lower profits in the US retail segment, where margins have contracted and reserves have increased,” the statement said.

However, he added that the share buyback program is expected to make up this slight shortfall.

Bank revenue was 12.78 billion, compared to 10.93 billion in the same quarter last year.

TD Bank said its Canadian retail and commercial banking services brought in $1.66 billion, compared with $1.68 billion in the year-ago quarter, primarily due to higher loan loss provisions, partially offset by revenue growth .

Tran said the bank’s business was driven by new accounts, growing 26% year over year thanks to a record quarter for new accounts in Canada, while spending on Canadian credit cards also hit an all-time high.

Mortgage volumes are also recovering from record lows at the start of the year, despite rising interest rates, he said.

“Of course people are a bit more cautious when interest rates rise, but structurally there are many requirements. »

And while those interest rates are impacting consumers, credit card balances remain below pre-pandemic levels and customers’ overall credit profiles are good, he added.