Really wild and unfortunate situation as TD has been doing well to expand in the US. The firm is also restructuring with both CEOs of TD AND TD Securities, comes at a convenient time…?
Curious to hear opinions on how this affects the firm’s IBD with its new growth capacities in the US, and what does this mean for general reputation of Canadian banks?
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Similar situation to WF. No direct impact on the securities arm apart from management transition, however, compliance costs will balloon over time and will inevitably lead to weak comp / layoffs. Massive reputation damage though
not sure how the other guy seriously wrote "no direct impact but weak bonuses / layoffs to come"
that's a direct impact - it's not the same BU but its a direct outcome of the scandal.
if you're not at TD on a guaranteed bonus plan via lateraling - I would get out ASAP
These massive fines are what made CS / DB lose their luster over time. CS had a different nail in the coffin but the fines obviously impact bonuses.
My understanding is that TD traditionally pays around 100% because it is lower tier and it tries to retain the IB talents.
The fine is not the worry here for IB, it's the cap on US growth that is. I believe it's US asset growth caps, which means the balance sheet is capped because they use customer deposits to fund it (one reason why TD can lend more than any other Canadian bank is because they have a solid US retail presence, giving them a deposit base to lend), which means TD can't throw massive debt facilities around as much as they would in the absence of this punishment. That in turn will impact ancill revenue generation and finally their IB arm / bonuses etc.
"The asset cap applies only to TD’s U.S. retail banking division — meaning the bank’s other units, such as TD Securities, could still expand their balance sheets." -- WSJ
Yes, but believe they'd have to borrow funds to lend, which increases their CoC / subsidies on lending so lending gets tighter.
WF vs TD ib
TD has historically never laid off people and pay great comp. Ever since the bank was fined for money laundering + merging with Cowen, lay offs have happened across teams. Junior level was hit heavy while all seniors who don't produce are kept at the firm. Morale is at an all time low. Expect high turnover in next few months and year. Comp has fallen significantly vs pre-fine.
Right now, TD is doing great in retaining its employees because they have no deal flow so no one can actually leave, especially in this poor lateral market.
Their reputation among juniors has gone down the shitter over the past year. Several competent juniors got laid off while non-producing Director+ and DEI girlies continue to ride the gravy train
At this point the banks will need to suffer from shit DEI hires for the inflection point to happen.
Agreed. No juniors take this bank seriously anymore. I understand office politics happens everywhere, but this firm is the literal example of the inverse of meritocracy
TD is a honeypot for lateral junior headhunters right now
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Del
There’s no restriction on balance sheet use / growth for CB/IB. I’ve been told to expect higher bonuses this year. The restrictions will weigh on the stock unfortunately but A&As don’t get stock comp so I don’t really see any impact.
Isn’t IB revenue up like 30% at TD? There’s no shot bonuses fall after that.
Do you know the morale among seniors whose SBC is likely getting railed?
Seniors are glad there’s finally a resolution
What about SF M&A team?
bump! also have you gotten SD invite after your first round yet?
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