TD Bank shares down amid damaging allegations

TD Bank shares sank on Friday as the company defended itself

TORONTO — TD Bank shares sank on Friday as the company defended itself against reports quoting unnamed employees who alleged they broke the law in order to meet sales targets and keep their jobs.

A CBC story published earlier this week said three of the bank’s employees reported feeling pressured to sign up customers for products and services they don’t need in order to boost profits.

In a followup story on Friday, CBC reported that hundreds of current and former employees at the bank wrote to the broadcaster, with some alleging they broke the law in order to earn points towards sales targets they are required to meet in order to stay employed.

TD Bank (TSX:TD) denied the reports, saying in a statement that it takes ethics and integrity seriously and that the environment described in the report is “at odds” with how it runs its business.

TD’s shares lost 5.55 per cent, or $3.88, finishing the day at $66.00.

Barclays analyst John Aiken said investors are concerned the fallout could be similar to what happened at Wells Fargo last year.

The U.S. bank paid large penalties and issued an apology after regulators said its employees opened millions of unauthorized accounts and credit cards.

“There is very little that TD itself can do in the near term to disprove the allegations and the full overhang is not likely to dissipate until a full investigation is concluded, which could take months,” Aiken said in a note to clients.

TD said in a statement that its code of ethics instructs employees not to put business results before the interests of clients.

“While we believe that having metrics and goals helps us to manage our business, we also believe that we will only achieve our goals by doing the right thing for our customers,” the company said.

TD also said that it has an anonymous whistleblower hotline where employees and customers can raise concerns, and that all reports are investigated.

“We also strive to make sure employees feel empowered to escalate any concerns about unethical practices to their manager’s manager,” spokeswoman Daria Hill said in a statement.

Ratings agency DBRS said it doesn’t expect any rating changes for TD, but that it will be monitoring the situation and how severe any damage to the bank’s reputation will be.

“Given its relatively high rating level and the importance of the Canadian retail-banking sector to TD, DBRS has limited tolerance for any adverse impact to TD’s franchise strength and/or earnings power, both of which are key underpinnings of the Bank’s credit profile and overall credit ratings,” DBRS said in a statement.

The ratings agency said it also expects regulators to review sales practices, whistleblower procedures and incentive compensation at all Canadian banks.

Just Posted

Relatives of murdered family critical of killers’ sentences

Open letter to sentencing judge criticizes ruling allowing killers to apply for parole in 25 years

City rolling out Green Carts

Green Carts used for organics, such as yard waste, food scraps and pet waste

New teaching standards applauded

New code of standards affecting teachers, principals and superintendents to kick in Sept. 1, 2019

UPDATED: Agriculture minister speaks to cattle producers

2018 Alberta Beef Industry Conference underway in Red Deer

Updated: Red Deer gets WHL Bantam Draft and Awards Banquet

WHL will holds its draft and awards ceremony in Red Deer for next three years

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Twenty years later, figure skating’s most famous backflip remains amazing (and illegal)

Figure skating involves spins, jumps, twizzles and a whole host of other… Continue reading

You don’t need to chop like a TV chef to get the job done

Standing in line at the emergency room, makeshift bandage around my finger,… Continue reading

Seychelles swaps debt for groundbreaking marine protection

CURIEUSE ISLAND, Seychelles — With deep blue waters, white sand beaches and… Continue reading

Trump endorses raising minimum age to 21 for more weapons

WASHINGTON — President Donald Trump endorsed stricter gun-control measures Thursday, including raising… Continue reading

Red Deer blood clinic in need of 600 donors

Aunt encourages Central Albertans to donate blood after losing nephew

Court considers banning diesel cars in German cities

BERLIN — A German court began considering Thursday whether authorities should ban… Continue reading

US women beat Canada in Olympic hockey; Gisin tops Shiffrin

PYEONGCHANG, Korea, Republic Of — A tense shootout, a dazzling deke and… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month