TD Bank (TD) Status Update summary

U.S. AML resolution and regulatory actions

• Reached a $3.09 billion settlement with U.S. authorities over AML failures, including plea agreements and no expected further monetary penalties; most of the amount is covered by prior provisions.

• OCC consent order imposes an asset cap of $434 billion on U.S. banking subsidiaries and stricter approval for new products and services, with plans to adjust the U.S. balance sheet to comply.

• DOJ and FinCEN will appoint a monitor to oversee AML remediation, with board oversight and certifications required for dividend distributions from U.S. subsidiaries.

• Remediation requirements from multiple regulators are being coordinated for efficient implementation.

AML remediation strategy and progress

• AML remediation is structured around five pillars: people and talent, governance and structure, policy and risk assessment, process and control, and data and technology.

• Overhauled AML leadership, adding 40 new leaders and over 700 AML specialists, including experts from regulatory agencies.

• Strengthened oversight and accountability across all lines of defense, including a dedicated U.S. board committee for AML/BSA oversight.

• Implemented new standards, processes, and training to improve detection and escalation of financial crime risks, with advanced data-driven technology deployed and ongoing enhancements planned.

• Significant progress in governance, technology, and customer onboarding; majority of solutions expected by end of fiscal 2025.

Financial and operational impacts

• Fiscal 2025 will be a transition year, with a planned 10% reduction in U.S. retail assets to comply with the asset cap.

• Asset reduction will be offset by selling low-yielding securities and reinvesting proceeds, with a $1.5 billion one-time capital impact and expected NII accretion over 2–3 years.

• AML remediation and governance costs will peak at $500 million in 2025, sustained through 2026, and are now reflected in the U.S. retail segment.

• No restrictions on TD Securities or other global businesses; dividend upstreaming from U.S. subs requires board certification but is not expected to be impeded.