TD Bank Group reported a significant turnaround in its financial performance for the third quarter ended July 31, 2025, posting a profit of $3.34 billion compared with a loss of $181 million in the same period last year. This strong recovery indicates the bank’s ongoing progress despite the challenges stemming from its anti-money laundering (AML) issues and related regulatory charges.
Financial Highlights and Business Segments
The reported earnings per share (EPS) stood at $9.72, markedly higher than $2.76 in the previous year, with adjusted earnings per share increasing to $6.19 from $6.09 a year earlier. Revenue for the quarter reached $15.3 billion, an increase from the previous year attributed to growth across multiple segments, including Canadian Personal and Commercial Banking, and U.S. Retail.
Canadian Personal and Commercial Banking delivered a record quarter with net income of $1.953 billion, improving 4% year-over-year. This sector saw record revenue of $5.241 billion, driven by loan and deposit volume growth. Digital sales across personal chequing, savings, and credit cards hit record year-to-date levels, emphasizing the bank’s increasing traction in digital banking services. Business banking also experienced strong loan growth and record retail originations in TD Auto Finance, supported by robust customer acquisition in Small Business Banking. A strategic partnership with Fiserv, a global payments technology provider, was also announced to enhance the TD Merchant Solutions offering.
The U.S. Retail segment sustained its performance momentum with progress in balance sheet restructuring. Excluding gains from the prior year’s investment in The Charles Schwab Corporation (which TD Bank sold in early 2025), U.S. Retail reported a substantial income increase to $760 million for the quarter. However, adjusted income saw an 18% decrease due to increased costs and AML remediation expenses.
TD Bank continued to benefit from consistent loan growth, especially in credit cards and commercial lending. U.S. card balances reached a new milestone of $3 billion, representing 12% growth year-over-year.
Anti-Money Laundering Charges and Recovery
The bank’s recovery follows a challenging period related to anti-money laundering compliance failures. In October 2024, TD Bank US Holding Company pleaded guilty to conspiring to launder money, the first national bank to do so under the Bank Secrecy Act (BSA). The failures included not updating transaction monitoring for known risks and excluding substantial transaction volumes from monitoring, which allowed money laundering networks to operate through TD accounts, contributing to over $670 million in illicit transfers.
As part of its plea agreement, TD Bank is paying $1.8 billion in penalties—the largest ever imposed under the BSA—and has committed to enhancing its AML compliance program with the engagement of an independent monitor. These steps are critical to rebuild regulatory trust and improve internal controls.
Despite the significant financial and reputational impact of the AML issues, TD Bank is gradually mitigating their effect on its business operations. The third quarter included restructuring and remediation charges related to costs associated with AML compliance upgrades and litigation, which affected adjusted income margins. However, the bank maintained strong capital levels with a Common Equity Tier 1 (CET1) ratio of 14.8%, supporting its resilience during this transition.
Strategic Initiatives and Outlook
TD Bank’s management highlighted ongoing efforts to optimize efficiency through restructuring and digital investments. The bank is focusing on systemic cost controls while advancing innovation in AI and digital banking services to improve customer experience and operational scalability. Its long-term vision remains centered on competing robustly in both Canadian and U.S. markets while positioning itself to grow sustainably.
CEO Raymond Chun stated, “Our teams delivered another quarter of strong performance driven by robust client activity and disciplined execution, underscoring the strength of our diversified business model. We are well-positioned to build on this momentum as we compete, grow, and build our bank for the future”.
While the stock faced some volatility around the earnings release, it experienced a pre-market rise reflecting positive investor sentiment regarding TD’s turnaround and strategic trajectory. Analysts have revised earnings expectations upward based on the bank’s improved performance and ongoing recovery efforts.
TD Bank’s third-quarter 2025 results demonstrate a remarkable recovery from last year’s anti-money laundering charge-related losses, with $3.34 billion in net profit and a strong leap in revenue and earnings per share. The Canadian Personal and Commercial Banking segment showed record performance, and the U.S. Retail business achieved solid progress despite AML remediation costs. The bank’s commitment to bolstering its AML compliance and executing strategic restructuring bodes well for its future stability and growth in the competitive North American market.
AML Editor’s article was originally published in delta-optimist on August 28, 2025