TD Bank, one of four lenders that pledged $32-billion to the planned buyout of BCE, has been setting aside reserves and writing down its potential exposure to the transaction on a mark-to-market basis since the deal was first signed in June, 2007. The buyout was officially cancelled Thursday.
"We are very proud to be part of the deal," said Colleen Johnston, chief financial officer at TD Bank, in a presentation Thursday at banking conference organized by Goldman Sachs.
Mr. Johnston said TD Bank will now move reserves on the loans back into the bank's income, but declined to say just how much that will benefit the bottom line. TD Bank was thought to be on the hook for $3.5-billion of loans. The bank accounted for writedowns on the BCE loans as part of the trading results from its TD Securities unit.
TD Bank's CFO said Tier 1 capital ratio will improve by 15 basis points as a result of balance sheet moves related to the BCE transaction. The bank's Tier 1 capital ratio was at 9.0 per cent after a recent $1.4-billion common share sale.