Do you have any confidence that the TD Board will make good decisions re management positions?
You can log me for two questions.
The asset cap is certainly going to impact growth. The impact of the asset cap and AML-related costs at TD could weigh on profitability, reducing EPS by 25-30 Canadian cents in 2025. The bank sees 2025 as a transition year, with net negative profit impact and potential stability ahead. TD plans to reduce its US assets by 10%, which may lower 2025 net interest income by $200-$225 million pretax, yet offset by portfolio-repositioning actions. These will entail selling $50 billion in low-yielding securities. These actions will incur a one-time after-tax cost of $1.5 billion, reducing capital, yet TD's current 12.8% regulatory ratio should be able to absorb the hit. The cost of governance and control improvements will increase to $500 million next year from $350 million in 2024. That being said, the stock's 12% hit in the past week 'probably' reflects the issue. But management needs to regain credibility. With confidence being so important in the sector, we are fairly confident that TD is going to make some big changes. This remains to be seen of course, but there is a new CEO coming in that could start to clean house.