Technology’s advance may seem inevitable, but it never really gets there without money to drive it. And that’s a point that Toronto Dominion Bank (TSE:TD) (NYSE:TD) is out to address, as it recently established a tech-focused banking unit that helps connect tech to cash. As a result, shares of the Canadian bank are up fractionally in Tuesday morning’s trading.
There are some that question how much impact this will have. After all, TD is currently facing regulatory ire over its lack of compliance with regulations designed to prevent money laundering. But this arm may be able to help with that and give it new reach with technology firms.
TD Bank even picked up an impressive hire to manage the operation, landing Shez Samji, formerly of Silicon Valley Bank, which, as most remember, went under and kicked off a whole wave of concern about which banks were insolvent. In this case, though, Samji will be helping TD connect to tech firms and supply them with resources to develop the next big thing in the tech sector.
TD Could Face a $4B Fine
This move comes at a pretty good time for TD Bank. Remember that “regulatory ire” we brought up a couple sentences back? There’s now a numerical value attached to it, as TD Bank could be looking at up to $4 billion. Earlier projections were calling for just half that, which means TD Bank is going to need some reliable sources of revenue quickly in order to cover that bill without having to sell assets.
Cases are cropping up all over, as TD Bank employees reportedly took bribes to bypass anti-money-laundering protections and even outright defraud customers. If the investigations prove this all true, it would be terrible news, and TD Bank will need cash to recover from it.
Is TD Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TD stock based on six Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 3.3% loss in its share price over the past year, the average TD price target of C$88.47 per share implies 18.62% upside potential.
