Shares of Toronto-Dominion Bank (TD.TO)(TD) jumped Monday morning on news the company will sell its remaining stake in Charles Schwab (SCHW), with around $8 billion of the proceeds going towards a share repurchase.

In a note to investors, RBC analyst Darko Mihelic says there will be sharp focus on TD’s intentions for the remaining proceeds, which analyst estimates put at $12 billion or more.

“The rest of the extra capital will be deployed in its business,” Mihelic said. “That is a lot of capital to deploy organically on top of existing capital and any capital that the bank can generate through normal course earnings.”

TD shares were trading at $85.80 on the Toronto Stock Exchange as at 11 a.m. Monday, up over 3.5 per cent from the closing price last Friday.

Mihelic’s take on the move is positive, writing that RBC never saw TD’s stake in Schwab as “critical.” The transaction “frees up capital and resources to be redirected in parts of the business that generate stronger returns and furthers TD's strategy.”

Canaccord Genuity analyst Matthew Lee also praised the plan. “Overall, we view this transaction favourably,” he wrote, “as it represents the first step in TD’s strategic review to reallocate capital, which is expected to be completed by mid-2025.”

Mihelic writes that there will be questions about TD's plans for the proceeds during a conference call scheduled for Tuesday. He speculates on some potential destinations for the money, including:

TD has thus far been vague about its intentions, with CEO Raymond Chun saying in a statement only that the bank “will invest the balance of the proceeds in our businesses to further support our customers and clients, drive performance and accelerate organic growth."

Chun, who began his term as CEO at the start of the month, has been leading a broad strategic review of the business, triggered by a money–laundering scandal at the bank’s U.S. retail operations that resulted in significant penalties.

Jefferies Financial Group analyst John Aiken writes that TD’s move “in theory is a net neutral impact on earnings,” with the TD share buyback cancelling out “almost the entire impact” of lost earnings contributions from Schwab.

“Whether this sets TD up for a different strategy in U.S. wealth management will be seen when its strategic review is completed and revealed to the street,” Aiken wrote.