Wealth management and insurance business earned $837M, up from $707M.

TD Bank Group says it has made progress on implementing measures meant to combat money laundering risks as it expects to spend upwards of $500 million this year on those efforts.

The bank was fined more than US$3 billion by U.S. regulators in 2024 after pleading guilty to multiple charges related to failures in its anti-money laundering program. At the time, it also agreed to remediate its anti-money laundering program and be subject to formal oversight of that process, which remains ongoing.

Leo Salom, president and CEO of TD Bank U.S., said Thursday that multiple steps have been taken on that front.

The measures include a new transaction monitoring system that has embedded machine learning and AI capabilities. TD has also streamlined its investigative practices and last quarter deployed a new know-your-customer platform which can provide customer risk ratings. 

“Specifically, this quarter, we updated our onboarding systems for money service businesses, providing our colleagues with the ability to sustainably identify, detect and manage these types of businesses going forward,” said Salom on as the bank reported its latest earnings.

He added TD also recently enhanced its financial crime risk management training program.

“(Anti-money laundering) remediation remains our top priority,” said TD’s chief executive Raymond Chun.

Those actions come as TD is also in the midst of a significant effort to reduce structural costs, while incorporating more artificial intelligence and automation into its workflows. The bank said last year it is aiming to find up to $2.5 billion in annual savings, which included job cuts.

Within that strategy, Chun said the bank has already achieved its goal for 2026 of cutting structural costs by $900 million.

“We believe we’re ahead of pace,” he told analysts. “We have momentum right across all of our lines of businesses.”

TD has said it expects to slash $500 million in annual expenses while also growing revenue by an equal amount specifically through adoption of automation and AI tools.

On Thursday, TD raised its quarterly dividend as it reported a second-quarter profit of $4.25 billion. The bank said Thursday it will now pay a quarterly dividend of $1.12 per share, up from $1.08 per share.

Its profit for the quarter ended April 30 amounted to $2.43 per diluted share compared with a profit of $11.1 billion or $6.27 per diluted share a year ago when it recorded the sale of its shares in the Charles Schwab Corp.

On an adjusted basis, TD earned $2.38 per diluted share in its latest quarter, up from an adjusted profit of $1.97 per diluted share a year ago.

Analysts on average had expected an adjusted profit of $2.26 per share, according to LSEG Data & Analytics.

Revenue for the quarter totalled $15.8 billion, down from $22.9 billion in the same quarter last year, while its provision for credit losses amounted to $1 billion compared with $1.3 billion a year ago.

“While TD did benefit from lower-than-anticipated provisions, we note that it saw solid contributions from each of its operating units, with the U.S. missing largely on the back of performing provisions,” said Jefferies analyst John Aiken in a note.

TD said Canadian personal and commercial banking net income totalled $1.9 billion for the quarter, up from $1.7 billion in the same quarter last year, helped by higher revenue and lower provisions for credit losses.

Its U.S. banking operations earned $813 million, up from a profit of $120 million a year earlier.

TD’s wealth management and insurance business earned $837 million, up from $707 million a year ago. It reported wealth management net income of $558 million, up 16%, and insurance net income of $279 million, up 23%.

In the second quarter, wholesale banking operations earned $612 million, up from $419 million in the same quarter last year.

The bank’s wealth management and insurance business has $797 billion in assets under administration and $643 billion in assets under management as of Apr. 30, up from $654 billion and $542 billion, respectively, at the same time last year. The increase reflected market appreciation and net asset growth.