TD Bank sells entire Schwab stake for $22b
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The news: Toronto-Dominion Bank (TD) is selling its entire 10.1% stake in Charles Schwab, amounting to 184.7 million shares, to raise about USD14 billion ($22.30 billion).
The numbers: Schwab will buy back USD1.5 billion of its shares from TD, subject to the offering’s completion.
Canada's second largest lender will use C$8 billion of the proceeds for a share buyback and invest the rest in its business.
The context: The sale, the largest secondary share offering of 2025 so far, follows TD’s USD3.1 billion settlement over US money-laundering failures.
It is CEO Raymond Chun’s first major move since taking over on 1 February.
TD had already sold 40.5 million Schwab shares in August, reducing its stake from 12.3% to 10.1%.
The sale could lower TD’s net income by about 7%, according to Bloomberg analysts who also said the planned buyback of 100 million shares should offset most of the loss.
The deal does not impact TD’s sweep-deposit agreement with Schwab, where uninvested cash in brokerage accounts is automatically transferred into interest-bearing accounts at the bank.
TD Securities and Goldman Sachs are managing the sale.
The sources: TD Bank announcement, Bloomberg
