(Reuters) -Toronto-Dominion Bank will offload its 10.1% stake in U.S. financial services firm Charles Schwab, the Canadian lender said on Monday, as part of a strategic review undertaken following a landmark U.S. fine.

TD holds 184.7 million shares of Charles Schwab, worth roughly $15.4 billion based on the last close.

Charles Schwab's shares were last down 3.2% in premarket trading, while TD's U.S.-listed shares rose 2.7%.

Canada's second-largest bank in December warned of a challenging 2025 and suspended its medium-term earnings forecast as it works through its anti-money laundering remediation program following a U.S. regulatory probe.

"As part of our strategic review, we have been evaluating capital allocation and have made the decision to exit our Schwab investment," TD's newly appointed CEO Raymond Chun said.

TD said it plans to use C$8 billion ($5.58 billion) of the proceeds for share buybacks and invest the rest to boost performance and accelerate organic growth.

"We believe this will simplify TD's U.S. operations," Jefferies analyst John Aiken said.

"Whether this sets TD up for a different strategy in U.S. wealth management will be seen when its strategic review is complete and revealed," he added.

In October, TD became the largest bank in U.S. history to plead guilty to violating a federal law aimed at preventing money laundering, and agreed to pay more than $3 billion in penalties to resolve the charges.

The plea deal includes a rare imposition of an asset cap and other business limitations.

Schwab said in a separate statement it has agreed to repurchase shares worth $1.5 billion from TD in a private transaction.

($1 = 1.4338 Canadian dollars)