Charles Schwab Shares Drop Over 4% After-Hours As TD Bank Cuts Stake Following $2.6B Anti-Money Laundering Fine Provision
Charles Schwab shares fell by over 4% in after-hours after Toronto-Dominion Bank reduced its stake in the Texas-based stock broker. It also announced that it is setting aside a further $2.6 billion to cover potential fines related to deficiencies in its anti-money laundering program.
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00:00So TD, Toronto Dominion Bank reported earnings and they gave some color into a charge that
00:07the bank is facing based on a money laundering thing.
00:11Dennis, you probably have more details on this than I do.
00:14Well, I'm watching last night and Charles Schwab starts getting hammered and I'm like,
00:19nobody's got the headline again.
00:20I'm like, this is Walmart, JD all over again.
00:22I'm like, somebody's done an offering.
00:24It's out there.
00:25It's definitely out there.
00:26You can tell by the way the stock is trading.
00:28Went 64 and a half, 64, 63 and a half, 63, 62 and a half, 62.
00:33And then finally we get the word, yes, it is actually TD dumping 44, wrote it down somewhere
00:40on this mess of a sheet here, something like 44 million shares.
00:44So they need to raise $2.5 billion because they've got a bunch of fines for money laundering
00:49that they've got to pay.
00:50So they're dumping a big chunk of their stake in Charles Schwab.
00:55Price went off the board at 61.65, Joel, man, these, when they're dumping like Walmart
01:00dumping JD and Schwab dumping or TD dumping Schwab, they get the bottom.
01:06They seem to get the very bottom.
01:07Stock did bottom down there at 61.35.
01:09It's bouncing back here this morning.
01:11But if you're wondering why Charles Schwab's getting hit, you can thank the Canadians TD
01:15bank because they did some money laundering or some clients did some money laundering
01:19or something.
01:20They got some fines.
01:21So that is why Schwab is getting whacked.
01:25Also coincidentally, which is probably not that much of a coincidence, also reported
01:29earnings here this morning, AB, so you might as well give those as well.
01:32Which earnings?
01:33Sorry.
01:34TD.
01:35TD reported earnings, company reported EPS of $2 Canadian dollars and five cents.
01:42That's like a lot less.
01:45Which missed the $2.07 Canadian dollar estimate.
01:49Charles came in at $14.17 billion, beat the $12.58 billion.
01:54But because you have that, you know, bottom line hit by charges there, the stock actually
02:00dipped down to around, I'm seeing around like $57 and has perked back up to about $58.65,
02:06but trading down about a buck this morning, down about 2%.
02:13I don't know.
02:14I think, yeah, it's had a good run back.
02:18TD Bank has had a good run back.
02:19TD Bank has had a good run back.
02:21The Canadian banks are all dirt cheap.
02:23Like I mean, you look, 5%, 6% dividends are across the board.
02:27They're all trading 10, 11 times earnings.
02:30They've all been cheap for a while though.
02:31And really, if you look at the Canadian banks, we're just doing them all together.
02:35They've gone nowhere basically for seven, eight years.
02:37TD Bank was $60 back in 2018, it is $60 here today.
02:42Yes, you got a 5% dividend at that time, so your money wasn't doing nothing, but it wasn't
02:47doing a lot of something either in a great bull market here.
02:50Royal Bank, probably best of breed.
02:52It's done okay.
02:53It's went from 80 to 112 in the last six years, which isn't even that great.
02:58I own some bank in Nova Scotia, which has been the same type of dog.
03:01It's actually down over the course of the last six years from 60 to 47.
03:06There's Bank of Montreal, where I do a lot of my business as well.
03:09It's done the same exact thing, $80.
03:13Basically looking back at 2018, it's $86 today.
03:16The Canadian banks are sitting there and just basically bonds now.
03:19They just pay your 5% dividend, the stock prices don't go anywhere.
03:22I don't know what's going to get the Canadian banks going, but they have been epically disappointing
03:27here over the course of the last six years.