10 Best Diversified Bank Stocks to Buy Now

7. The Toronto-Dominion Bank (NYSE:TD)

Number of Hedge Fund Holders In Q2 2024: 22

The Toronto-Dominion Bank (NYSE:TD) is another Canadian bank. It has a presence in the US and Canadian commercial banking, retail banking, wealth management, and insurance markets. While most banks benefit from a diversified business model, it also creates a unique set of risks. This is also the case for The Toronto-Dominion Bank (NYSE:TD), which has faced headwinds from insurance and regulatory compliance. These are reflected in the stock, which is down 4.19% year to date and up by a modest 1.65% over the past twelve months. Money laundering concerns have made it set aside $2.6 billion in contingency, and the bank is expected to take a $1 billion hit to the income statement later this from these. Additionally, The Toronto-Dominion Bank (NYSE:TD) saw rising weather catastrophe related claims during its Q3, which led to the wealth and insurance division’s net income dropping by $191 million sequentially. The multi billion dollar regulatory allocations should impact The Toronto-Dominion Bank (NYSE:TD)’s plans of growth and its narrative should be shaped by these in the near future at least.

The Toronto-Dominion Bank (NYSE:TD)’s management is busy managing costs during this tumultuous time. Here’s what it had to say during the Q3 2024 earnings call:

“From an expense perspective, a few different levers that we’re looking at managing as we move forward. And certainly, one of them is around finding the right mix within the complements. And when you actually look at the traffic within our branches, transaction traffic within branches are actually down 50%, over the past – since the pandemic. And so, we’ve looked at how do, we actually find the right balance.

And what we’re doing within our branch network, is actually moving from a one service colleague to one sales colleague, to two sales colleagues, or two adviser colleagues to one service colleague, that’s driving significant productivity while we’re able to actually take down costs, in our Canadian branch network on that side. And so, I see that playing through from a productivity perspective. The other thing that we’re looking at is likely, or we are looking across the entire spectrum on expense management in the Canadian personal bank, whether it’s real estate, whether it’s from the actual the head office complements, and what have you. And so, we continue to be looking at that, as we line up our strategies as we move forward.”