TD Bank Group plans to invest $1 billion over a two-year period to beef up its anti-money-laundering controls, after compliance failures led to historic regulatory penalties and handcuffed its U.S. growth. The bank also juggles a new restructuring plan, the scaling back of its American business and growing economic uncertainty due to U.S.tariff policies. The company had previously projected spending $500 million on anti-money-laundering remediation efforts during the fiscal year that ends in October, as it upgrades its training, analysis capabilities and protocols. TD Chief Financial Officer Kelvin Tran told analysts that the bank expects similar investments in the fiscal year that ends in October 2026. “We wanted to give the Street a sense of what 2026 was going to look like,” Salom said. “The composition of spend might change a little bit. It might be a little less remediation, more validation work, more lookbacks, monitor costs, et cetera. … But we think the overall spend level is going to be similar.” Across the first two quarters of 2025, the bank has invested $196 million on the anti-money-laundering compliance efforts. Salom said there will be an uptick in those expenses in the back half of the year as the company delves “into the meat of our remediation delivery programs.” TD plans to deploy machine learning technology in the third quarter to “increase investigative productivity,” along with additional reporting and controls for cash management activities. The bank feels confident about its expense guidance for 2025 and 2026, and those costs will eventually decline “at some point in the future,” Salom said. TD also said that it’s on track to meet its previous projection of a 10% reduction in U.S. assets by the end of October. At the end of April, the U.S. bank had about $399 billion of assets, putting it below the $434 billion cap imposed by the Office of the Comptroller of the Currency. The bank sold or ran off about $11 billion in U.S. loans during the second quarter, and announced plans to wind down a $3 billion point-of-sale financing business that services third party retailers in the U.S. TD also plowed ahead with plans to remix its bond portfolio by selling relatively low-yielding bonds to reinvest in higher-returning securities. Salom said the bank should meet its forecast of restructuring $50 billion of securities in the next few weeks. The bank expects to generate a benefit to net interest income of close to $500 million between November 2024 and October 2025, he said. “We think new CEO Raymond Chun is putting the bank on the right track,” wrote Maoyuan Chen, an equity analyst at Morningstar, in a note. “2025 will be a transitional year as TD is actively remediating its US anti-money-laundering system with elevated expenses and repositioning its US balance sheet for its asset cap growth limitations.”