NOTE 7: INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
INVESTMENT IN THE CHARLES SCHWAB CORPORATION
On February 12, 2025, the Bank sold its entire
remaining equity investment in The
Charles Schwab Corporation (“Schwab”) through a
registered offering and
share repurchase by Schwab. Immediately prior
to the sale, TD held
184.7
million shares of Schwab’s common stock, representing
10.1
% economic ownership.
The sale of the shares resulted in proceeds
of approximately $
21.0
billion and the Bank recognized in Other income
(loss) a net gain on sale of approximately
$
9.2
billion. This gain is net of the release of
related cumulative foreign currency translation
from AOCI, the release of AOCI on designated
net investment hedging
items, and direct transaction costs. For segment
reporting, the Bank recognized an after-tax
gain of $
8.6
billion in its Corporate segment and $
184
underwriting fees in its Wholesale segment
as a result of TD Securities acting as a lead
bookrunner on the transaction. In the current
quarter, the Bank revised its
estimate of taxes owed on the gain from its disposition
of Schwab shares, which increased
the Bank's after-tax gain to $
8.9
billion. Refer to Note 15 for further
details.
The Bank discontinued recording its share
of earnings available to common shareholders
from its investment in Schwab following
the sale. Prior to the sale, the
Bank accounted for its investment in
Schwab using the equity method. The Bank’s
share of Schwab’s earnings available to common
shareholders was reported
with a one-month lag. The Bank’s share of net
income from its prior investment in Schwab
of $
74
305
million during the three and six months ended
April 30, 2025, respectively, reflects net income after adjustments
for amortization of certain intangibles net of
tax.
The Stockholder Agreement was terminated
by the Bank’s sale of its equity investment in Schwab.
The Bank continues to have a business
relationship with
Schwab through the insured deposit account
agreement (“Schwab IDA Agreement”).
INSURED DEPOSIT ACCOUNT AGREEMENT
On May 4, 2023, the Bank and Schwab entered
into an amended Schwab IDA Agreement,
with an initial expiration of July 1, 2034.
Pursuant to the Schwab IDA
Agreement, the Bank makes sweep deposit
accounts available to clients of Schwab.
Schwab designates a portion of the deposits
with the Bank as fixed-rate
obligation amounts. Remaining deposits are designated
as floating-rate obligations. The IDA deposit
floor is set at US$
60
Refer to Note 26 of the Bank’s 2025 Annual
Consolidated Financial Statements for further details
on the Schwab IDA Agreement.