TD’s Outlook Changed to Negative by Moody’s on Cost of US Probe
(Bloomberg) -- The rising cost of a US investigation into Toronto-Dominion Bank’s money-laundering controls is casting a darkening shadow over one of the strongest bank credit ratings in the world, with Moody’s Ratings following rivals in placing a negative outlook on the firm.
Most Read from Bloomberg
Nazi Bunker’s Leafy Makeover Turns Ugly Past Into Urban Eyecatcher
How the Corti?os of S?o Paulo Helped Shelter South America’s Largest City
TD’s announcement last week that it’s stockpiling an additional $2.6 billion to resolve inquiries raises concerns about the severity of the case and its ultimate toll, Moody’s said in statement late Tuesday.
The shift “reflects the inherent uncertainty related to the magnitude of financial penalties and nature and duration of possible nonfinancial penalties that it could incur related to these challenges,” Robert Colangelo, a senior credit officer at Moody’s, said in the statement. The episode “may not be consistent” with the bank’s a1 baseline credit rating, he said, noting the firm is among the highest-rated banks globally.
A spokesperson for the bank declined to comment.
Canada’s second-biggest lender estimated Aug. 21 that it may pay $3 billion related to its US compliance lapses. Standard & Poor’s and Fitch Ratings changed their outlooks to negative earlier this year, citing government scrutiny of its controls.
--With assistance from Christine Dobby.
Most Read from Bloomberg Businessweek
Far-Right ‘Terrorgram’ Chatrooms Are Fueling a Wave of Power Grid Attacks
Hong Kong’s Old Airport Becomes Symbol of City’s Property Pain
Losing Your Job Used to Be Shameful. Now It’s a Whole Identity
FOMO Frenzy Fuels Taiwan Home Prices Despite Threat of China Invasion
?2024 Bloomberg L.P.