TORONTO (Reuters) - Toronto-Dominion Bank
The market shrugged off the news, and analysts said investors would probably overlook the charge, even though it amounts to more than the C$93 million in wholesale banking profit that TD reported in the second quarter.
"I think in this case, TD has done extremely well through the credit crunch so far, and I don't think people are going to change their assessment of the risk management culture yet," said Ohad Lederer, a banking analyst at Veritas Investment Research in Toronto.
TD shares were up 20 Canadian cents, or 0.3 percent, at C$63.54.
TD said the charge was tied to the activities of a senior trader who is "no longer with the company."
The trader left the bank on June 23 and the bank then discovered the mispriced credit index swaps, spokeswoman Simone Philogene said.
The bank said it was cooperating with regulators.
Other analysts agreed that the bank was taking a relatively small charge, compared to the billions that U.S., European and Canadian banks have written down during the credit crisis.
"That's a pretty small hit," said Douglas Davis, president at Davis-Rea. "I think TD wants to be known as the most defensive bank with the cleanest balance sheet."
TD Bank President and Chief Executive Ed Clark said the bank was "very disappointed" with the loss.
"Our company has a strong risk culture and we deeply regret this incident. We take this very seriously and will make every effort to ensure that this doesn't happen again."
TD Bank, Canada's second largest by market capitalization, reported C$852 million in profit in the quarter to April 30.
($1=$1.02 Canadian)
(Reporting by Lynne Olver and Cameron French; editing by Janet Guttsman)
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