TORONTO (Reuters) - Toronto-Dominion Bank (TD.TO) on Friday stood by its business practices after a report by CBC News suggested the bank had put staff under pressure to meet tough sales targets.
TD shares ended down 5.6 percent at C$66.00 on Friday, after having fallen as low as C$65.83 earlier in the session. The benchmark Canada stock index .GSPTSE ended flat.
The CBC report suggested that TD customers were moved to higher fee accounts or their overdraft and credit card limits were increased without their knowledge to help staff meet targets.
In an emailed statement to Reuters, TD said, “The environment described in the media report is very much at odds with how we run our business and we don’t recognize it from our own perspective, experience or assessments.”
Sales targets have become a hot button issue in North America since U.S. bank Wells Fargo reached a $185 million settlement with U.S. authorities last September over findings that its branch staff had opened up to 2 million unauthorized customer accounts amid pressure to meet internal sales goals.
“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,” Barclays analyst John Aiken said in a research note on Friday.
Traders said investors had been spooked by the CBC report because allegations of misconduct are rare against Canadian banks, which have previously avoided the types of consumer scandals that have afflicted lenders in the United States and United Kingdom.
TD said in its statement that it had a culture of putting the needs of customers first and acting with integrity and that was reflected in its performance management practices.
“We take our commitment to ethics and integrity very seriously. Every employee in our company must abide by the Code of Conduct and Ethics which requires employees to act ethically and to not allow a focus on business results to come before our focus on our customers,” it said.
The Office of the Superintendent of Financial Institutions (OSFI), Canada’s banking regulator, said in an emailed response a request for comment that it was “aware of the issue” but it does not publicly discuss its supervisory work.
The Financial Consumer Agency of Canada (FCAC), the country’s consumer watchdog, said in an emailed comment that it was aware of “allegations about financial institutions signing consumers up for products or services without providing all the required information, particularly about fees related to the products.”
Neither agency named TD in the comments.
Reporting by Matt Scuffham; Editing by Toni Reinhold