TD to Sell $9B Residential Mortgages in Balance Sheet Adjustment
Toronto-Dominion Bank aims to sell approximately $9 billion worth of residential mortgage loans as it aligns its balance sheet with a new ceiling imposed by U.S. regulators. The move is part of a plea agreement reached in 2024 regarding TD's role in failing to prevent money laundering.
The portfolio for sale comprises jumbo mortgages granted to U.S. homeowners with high credit scores. Bid submissions are expected next week.
In October 2024, TD agreed to pay hefty fines and penalties and have its assets at its two U.S. retail banking units capped as part of a guilty plea for its negligence in curbing money laundering by cartels and criminals. The asset cap currently stands at $434 billion.
To ensure continued operations within the asset cap, TD is restructuring its holdings. It is offloading assets, including up to $50 billion of low-yielding investment securities, and reinvesting the proceeds.
A TD spokesperson has refrained from commenting.