Toronto-Dominion Bank (TD Bank) has announced a strategic plan to reduce costs while reinstating previously suspended growth guidance. 

The bank aims to touch a 16% adjusted return on equity and a 7% to 10% growth in adjusted earnings per share by the end of fiscal 2029, according to a Bloomberg report. 

This guidance aligns with previous targets set before the bank suspended its growth target plan in December as a response to a money-laundering settlement in the US. The bank paid more than $3bn in penalties for its lapse to identify money laundering at several American branches. 

To reach the targets, TD Bank intends to implement cost-saving measures amounting to C$2bn to C$2.5bn ($1.4bn to $1.8bn) annually. 

Part of these savings will be derived from an ongoing restructuring initiative. Further reductions are expected through advancements in automation and artificial intelligence (AI), which are projected to save C$500m annually. 

The bank has also outlined plans to expand its fee-generating businesses, particularly in wealth management, by hiring 1,200 new advisers in Canada and 500 in the US. 

This expansion aims to increase client engagement and product sales, said the publication. 

In a statement, TD Bank Group president and CEO Raymond Chun said: “We are building a simpler, faster and more efficient TD to outpace the market and accelerate growth. 

“We’re investing in talent, harnessing AI, and deploying new digital capabilities to help our clients achieve their financial goals. 

“TD is a tremendous organisation with North American scale and market-leading franchises. We are building on our unique strengths to enhance the client experience, drive performance, and deliver long-term value to shareholders.” 

Chun, who succeeded Bharat Masrani, has initiated several changes, including a 2% workforce reduction and the sale of the bank’s stake in Charles Schwab. 

Proceeds from the Schwab sale will fund a share buyback programme valued between C$6bn and C$7bn, with the bank projecting to return around C$15bn in excess capital to shareholders by 2026. 

TD Bank has also made changes to its governance structure, with five board directors stepping down in April and Birch Hill Capital Partners Management co-founder John MacIntyre assuming the role of board chair.