Toronto-Dominion Bank said it will cut about 2% of its workforce as part of a restructuring program begun in the second quarter following its historic anti-money laundering settlement.

The bank, with about 95,000 employees, said the restructuring will cost up to C$700 million ($505 million) in pre-tax charges over the next several quarters, according to a statement Thursday. It expects the effort will generate about C$100 million in pre-tax savings this fiscal year and annual savings of up to C$650 million going forward.

Canada’s second-largest lender also reported earnings that beat estimates after setting aside less money than expected for souring loans. It earned C$1.97 per share on an adjusted basis in its fiscal second quarter, topping the C$1.78 average analyst forecast. Provisions for credit losses totaled C$1.34 billion for the three months through April, less than the C$1.41 billion analysts had forecast.

Under new Chief Executive Officer Raymond Chun, the bank embarked on a strategic review after it agreed to pay almost $3.1 billion to settle with US authorities last year over anti-money-laundering failures. The firm is also constrained from growing its American retail assets and has said it will direct new capital spending to its domestic banking and capital-markets operations.

Toronto-Dominion will announce its revised strategy and new financial targets at an investor day on Sept. 29, it said Thursday.

Kelvin Tran, the bank’s chief financial officer, said the cost-cutting program is part of the strategic review and is aimed at finding efficiencies in part by automating processes.

“We’re looking at how we can structurally reduce costs across the bank,” he said in an interview, adding that some of the employee exits will be “managed through attrition.”

The bank has already incurred C$163 million of pre-tax restructuring charges, tied to “real estate optimization, employee severance and other personnel-related costs, and asset impairment and other rationalization, including certain business wind-downs,” it said.

Headline Beat

Toronto-Dominion is the first of its large rivals to report earnings since US tariffs on a range of Canadian imports kicked in, raising the specter of slowing growth and job losses. That’s focused attention on the credit quality of businesses and consumers — and on the money lenders are setting aside in case they start to default on their debt.

“TD delivered strong results this quarter, with robust trading and fee income in our markets-driven businesses as well as deposit and loan growth in Canadian personal and commercial Banking,” Chun said in its statement.

The bank’s wealth-management and insurance division as well as its capital-markets business also saw revenue growth in the period, TD said.

“Better than expected results reflected strength across all segments compared to our estimates,” Royal Bank of Canada analysts led by Darko Mihelic said in a note to clients. They added that TD’s total provisions for loan losses also came in lower, primarily because it put less money aside for impaired loans than expected.

“Overall, a positive result on the headline beat, which should drive the shares higher,” said Bank of Nova Scotia analysts led by Mike Rizvanovic.

Read More: TD’s Laundering Settlement ‘Darkest Day’ for Bank, Chair Says

Toronto-Dominion has ample capital — it raised $13.9 billion after selling its 10.1% stake in Charles Schwab Corp. earlier this year — and plans to buy back up to C$8 billion worth of its shares. Its stock has steadily climbed after settling the US money-laundering probes and its shares are up about about 18% year-to-date.

–By Christine Dobby (Bloomberg)