April 30 (Reuters) - Canada's TD Bank said on

Tuesday it had taken an initial provision of $450 million in

relation to ongoing discussions with a U.S. regulator over an

anti-money laundering probe and any penalties it might be

slapped with.

The lender

disclosed

last year that it was cooperating with authorities in an

investigation into its AML compliance program by the U.S.

Department of Justice.

TD Bank said its discussions with three United States

regulators and the DOJ were ongoing and that it anticipates

additional monetary penalties.

The bank said the provision does not reflect the final

aggregate amount of potential monetary penalties, or any

non-monetary penalties "which are unknown and not reliably

estimable at this time".

"TD's AML program was insufficient to effectively

monitor, detect, report, and respond to suspicious activity.

Work has been underway to remedy these deficiencies," the

company said in a statement.

Analysts expected the fine to be anywhere between $500

million and $1 billion - a sum the lender can comfortably

afford, given its strong capital position.

Earlier this month, TD CEO Bharat Masrani

acknowledged

that the lender's AML compliance program was not up to the

mark and that it was working on strengthening it.

Its $13.4 billion acquisition of U.S. regional lender

First Horizon ( FHN ) was also called off last year, shortly

before it disclosed the AML probe, citing delays in regulatory

approvals.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Anil

D'Silva and Pooja Desai)