TD’s US Retail Bank, Once Prized, Now Drags Down Its Stock Price

Toronto-Dominion Bank’s expensive foray into the US was supposed to supercharge its growth. Instead, it’s become a drag on profitability and badly dented the lender’s reputation.

A busted $13.4 billion takeover of First Horizon Corp., a money-laundering probe into its US branches and anemic returns across its stateside operation have investors turning sour on Canada’s second-largest bank. Despite some positive momentum in recent weeks, its stock has way underperformed all other major Canadian banks.

Those once-prized US assets, which include more than 10 million customers, accounted for about 23% of net income and 25% of revenue in the ...