https://www.pymnts.com/personnel/2024/td-bank-money-laundering-troubles-could-lead-ceo-change/

TD Bank’s ongoing issues with its anti-money laundering (AML) controls could usher in a leadership change.

That’s according to a Wednesday (Aug. 28) Reuters report, based on interviews with 10 shareholders at Canada’s second-largest bank, as well as two analysts.

They said a change in CEO is “imminent” in 2025, per the report, with most of them positing the notion of an outside hire who has knowledge of the U.S. banking sector, and who can start fresh once TD resolves its AML troubles.

“Once we get past these rocky waters, and there is a little bit of light at the end of the tunnel, maybe that will help create more clarity for leadership change,” said Ben Jang, a portfolio manager at TD shareholder Nicola Wealth, according to the report.

A spokesperson for the bank told Reuters it has a robust process for planning succession, adding that TD’s “senior executive bench is strong.” TD told PYMNTS it had no comment beyond that.

TD CEO Bharat Masrani took the job 10 years ago when the bank was in expansion mode and focused on the U.S., where it now has roughly 1,150 branches on the East Coast, more than it has in its home country, the report said.

The news came days after the bank released quarterly earnings that showed a $2.6 billion provision related to a possible investigation into the AML program. This came after a $450 million provision announced during the prior quarter.

U.S. regulators have been looking into the Canadian bank’s AML efforts, causing TD to embark on a “remediation” of the program.

Earlier this year, TD fired more than a dozen employees, bringing criminal charges and disciplinary action against some of them.

There is growing scrutiny of AML practices at financial companies.

“And where these firms, banks and FinTechs among them, are deemed to come up short, there’s a (literal) price to pay,” PYMNTS reported last month. “In the meantime, the very rules governing AML and fraud-fighting efforts may change, as a commentary period is ongoing as regulators seek input on the use of advanced technologies to sharpen fraud defenses at financial institutions.”