Fitch cites anti-money laundering deficiencies for bank's outlook downgrade amid U.S. investigations
Fitch Ratings Inc. a has announced it has downgraded its outlook on TD Bank Group to negative from stable because of potential fallout from anti-money laundering deficiencies at the bank, according to BNN Bloomberg.
The credit rating agency affirmed its long-term credit rating of AA- for the bank but noted that the negative outlook reflects the uncertainty from multiple investigations into the bank's anti-money laundering practices in the US.
Fitch indicated that these investigations' outcomes could include monetary and non-monetary penalties, such as barriers to further acquisitions in the US. Efforts to address these shortcomings could also divert focus from ongoing operations.
Last week, TD reported a 22 percent drop in profits from last year, primarily due to a $615m charge related to one of the investigations. The bank stated it is pulling back on expansion plans in the US as discussions with regulators continue.
TD mentioned that other rating agencies have so far maintained their stable outlook on the bank.
