Toronto-Dominion Bank scrapped plans to open some U.S. branches and will combine other locations as part of a restructuring that cost Canada’s second-largest lender C$228 million ($183 million), Chief Financial Officer Colleen Johnston said.
“We are consolidating branch and store locations on both sides of the border, and this also includes cancellation of certain, future new store commitments that are in our pipeline in the United States,” Johnston, 56, said Thursday in a telephone interview, without identifying the branches. “Certain locations weren’t as promising for us as they would have been several years ago.”
The restructuring, announced Thursday along with second-quarter results, seeks to control expense growth while making the bank “fitter and faster” with better processes and more efficient operations, Johnston said.
“We need to invest in areas like technology transformation, digital and mobile capabilities, regulatory infrastructure just to keep pace,” she said. “And all of this is of course is happening in a slower growth environment.”
Toronto-Dominion, which had already been closing or combining some U.S. branches, will shut an additional 24 U.S. stores, bringing the total outlets affected to 45, Mike Pedersen, group head of U.S. banking, said in a conference call.
“We have mature stores that can be merged into others with really negligible customer impact,” Pedersen said. “We would rather deploy some of that capital to open stores in growing areas in order to acquire more customers at a faster rate.”
Toronto-Dominion will open 21 U.S. branches this year and probably the same number in 2016, Pedersen said. The bank’s goal to be a Top 3 bank by branches in New York City remains intact, Johnston said.
The company reported 330 fewer employees as of April 30 compared with the first quarter, with reductions in both Canadian and U.S. retail banking.