**Toronto-Dominion Bank Sees Growth Potential Amid Asset Cap**
Toronto-Dominion Bank’s U.S. division is exploring growth opportunities despite being limited by a cap on its retail banking assets. Leo Salom, head of the bank’s U.S. operations, expressed optimism during a recent conference in Toronto, emphasizing the bank’s strengths and ongoing infrastructure evaluation.
The Canadian bank’s U.S. division has faced restrictions for nearly a year following a guilty plea in a significant anti-money-laundering investigation. Currently, its assets are capped at $434 billion, a limit that will remain until regulators are satisfied with the bank’s risk and compliance improvements. To address these issues, Toronto-Dominion has recruited 40 anti-money-laundering experts and invested hundreds of millions in reforms, with most expected to be completed by year-end. However, a timeline for lifting the asset cap remains uncertain.
Despite these challenges, Salom indicated that Toronto-Dominion plans to enhance returns and expand specific business lines, particularly in credit card lending and wealth management. The U.S. division serves 10 million retail customers and 700,000 small business and commercial clients, boasting over $230 billion in deposits, which provides a stable funding source. Salom highlighted the bank’s strong relationships with entrepreneurs, particularly as a leading provider of government-backed loans on the East Coast.
Additionally, the bank has created room for further lending by exiting less profitable loan portfolios and restructuring its bond holdings. As of the end of July, its U.S. assets totaled $386 billion, achieving a target of reducing assets by 10% and providing $48 billion of “headroom” for growth. Salom stated, “We’ve got the capacity to grow — certainly at the historical levels of growth and/or at market-expected growth rates for many years to come.”
In the credit card sector, Salom noted that industry expert Christopher Fred, who joined from Citigroup in 2022, is spearheading efforts to enhance digital capabilities and underwriting processes. The bank has a partnership with Nordstrom that extends to 2032, and Salom aims to increase cross-selling of TD-branded cards to its checking customers. Cross-selling is also a key focus for the bank’s wealth management strategy, which has not been aggressively pursued in the U.S. due to previous partnerships with TD Ameritrade, now sold to Charles Schwab Corp. Toronto-Dominion divested its remaining stake in Schwab earlier this year.
With these limitations lifted, the bank is concentrating on building its wealth management capabilities, particularly targeting mass-affluent clients.
**FAQ**
*What is the current status of Toronto-Dominion Bank’s U.S. operations?*
Toronto-Dominion Bank’s U.S. operations are currently under an asset cap of $434 billion due to compliance issues, but the bank is actively working on reforms and plans to expand in specific areas like credit cards and wealth management.
