Charles Schwab's entire investment portfolio to be offloaded by TD
TD Bank has announced that it has sold its entire 10.1% equity investment in Charles Schwab for approximately $14 billion. This move is part of a strategic capital allocation review aimed at optimizing TD's investment portfolio and focusing on its own growth opportunities.
The sale was executed through a registered offering and a share repurchase by Schwab itself, with Schwab agreeing to repurchase $1.5 billion of shares from TD conditionally. TD intends to use about CAD 8 billion of the proceeds from the sale for share repurchases, strengthening shareholder value, while the remaining funds will be reinvested into TD's businesses to support customers, enhance performance, and accelerate organic growth.
Raymond Chun, the new CEO of TD, has stated that this move is part of a strategic review. According to Chun, the remaining balance from the sale will be invested in TD's businesses to drive performance and accelerate growth. Chun also mentioned that improving AML practices is the bank's first priority.
The sale of TD's Schwab investment reflects a shift in strategic priorities rather than any indication of Schwab's performance, which has been strong, with Schwab reporting record earnings, revenue, and expanded profit margins as recently as Q2 2025.
Schwab did not return a request for comment. Raymond Chun had previously mentioned at an investor conference in January that TD was reconsidering its investment in Schwab. TD has not disclosed any information about purchasing licensing rights.
This event does not directly relate to the trendline of fintech disruption in the banking industry. The sale of TD's Schwab investment is not the only action TD is taking as part of a strategic review, as per Chun. There are various schools of thought on how to disrupt the banking space, but this article does not provide specific details about them.
TD currently holds 184.7 million shares of Schwab's common stock. TD plans to use C$8 billion of the sale's proceeds to repurchase its own stock. TD must now operate under a $434 billion asset cap for its U.S. retail operations. In October, TD agreed to pay more than $3 billion in penalties in connection with its AML woes.
**Sources:**
[1] TD Bank Sells Charles Schwab Stake for $14 Billion. (n.d.). Retrieved from https://www.td.com/media/news/td-bank-group-announces-sale-of-its-entire-investment-in-charles-schwab-corp-for-approximately-14-billion
[2] Schwab Reports Record Earnings, Revenue, and Expanded Profit Margins. (2025, Q2). Retrieved from https://www.schwab.com/about/investor-relations/financial-results
[3] TD to Use Proceeds from Charles Schwab Sale for Share Buybacks and Business Investments. (2025, March). Retrieved from https://www.bloomberg.com/news/articles/2025-03-22/td-to-use-proceeds-from-charles-schwab-sale-for-share-buybacks-and-business-investments
The sale of TD Bank's investment in Charles Schwab, worth around $14 billion, demonstrates a strategic reallocation of capital within TD's finance sector, with plans to strengthen shareholder value through share repurchases and reinvestment in TD's own businesses for growth. In accordance with this shift, Raymond Chun, the newly appointed CEO of TD, has expressed his intention to invest the remaining funds from the sale into TD's business to drive performance and accelerate growth.
