TD Bank Group Plans $10 Billion Share Buyback Program
TD Bank Group intends to repurchase up to $10 billion worth of its common shares, representing about 3.74% of its outstanding stock. The program requires approval from Canada's banking regulator and follows a recent reduction in capital buffer requirements.
TD Bank Group plans to repurchase up to $10 billion worth of its common shares, representing approximately 3.74 per cent of the bank’s issued and outstanding shares as of Aug. 31. Under the plan, the lender intends to buy back up to 61 million shares, all of which will be cancelled. The new buyback program is expected to be completed by July next year and is subject to approval by the Office of the Superintendent of Financial Institutions (OSFI).
Buying back shares reduces the equity base, increasing return on equity and earnings per share.
The announcement follows TD's completion of a previous share repurchase program on Sept. 25. That program, which began on Jan. 20, saw the bank spend $7 billion to buy back 47.2 million of its shares.
The planned buyback comes after OSFI reduced the domestic stability buffer in June. The regulatory change allows banks to maintain a Common Equity Tier 1 (CET1) ratio of 11 per cent instead of the previous 11.5 per cent requirement, freeing up billions of dollars in capital for Canadian lenders. As of July 31, TD’s CET1 ratio stood at about 14.3 per cent.
CEO Raymond Chun said the lender could return more than $13 billion to shareholders in fiscal 2027. Chun stated that the bid to reach the bank's target CET1 ratio of 13 per cent drives the potential shareholder returns.