TD Bank (TD) Status Update summary

Strategic review and capital allocation

• Announced sale of entire 10.1% stake in Schwab as part of a comprehensive strategic review focused on optimizing capital allocation and organic growth opportunities.

• Proceeds from the sale will be used to buy back up to 100 million shares (CAD 8 billion) over 12 months, with the remainder invested in targeted organic growth initiatives and performance acceleration.

• The strategic review is organized around four pillars: rebalancing business mix, simplifying the portfolio, optimizing costs, and evolving capabilities, especially in technology and digital.

• Updates on share repurchases and strategic investments will be provided on quarterly earnings calls, at an Investor Day in the second half of 2025, and through investor engagement events.

Financial impact and transaction details

• Schwab shares sold at $79.25 USD per share, generating a 23% IRR and 2.2x cash-on-cash return since 2020.

• Net proceeds after taxes and fees are $13.9 billion USD (CAD 20 billion), creating $15.1 billion (247 bps) in CET1 capital.

• After the buyback, approximately 116 bps of CET1 capital will remain, with a target CET1 ratio now around 13%.

• The share buyback is expected to be accretive on a run-rate EPS basis, with conservative assumptions for returns on remaining proceeds.

• Tax on the sale is approximately $600 million, about 5% of the gain.

Transaction overview

• 184.7 million Schwab shares will be sold, with 165.4 million via offering at $79.25 USD per share and 19.2 million repurchased by Schwab for $1.5 billion.

• The transaction is expected to close on February 12, 2025, subject to customary conditions.