TD Bank Group CEO Bharat Masrani said he was confident the bank, Canada's second biggest lender, would resolve issues with regulators that led to the collapse of its planned $13.4 billion acquisition of regional lender First Horizon.

Masrani's comments come after TD last month called off the deal citing lack of clarity on when it would get regulatory approvals, more than a year after it first proposed the deal.

The Wall Street Journal later reported that the bank's handling of "suspicious" customer transactions was behind regulators' refusal to approve the deal.

Masrani, speaking at the bank's annual investor day on Thursday, said the issues had "nothing to do with our good faith dealings with customers."

"We are working with our regulators to put this matter behind us. And I'm confident that in time we will," Masrani said, without elaborating on the issues being discussed.

"And more broadly, we are very well capitalised with strong liquidity - critically important in this period of economic uncertainty and volatility in the banking sector."

He also said its U.S. arm had "substantial growth potential."

Investors had expressed concerns on TD's U.S. growth, which the bank has cited as a key priority as it deals with a saturated market at home. It had been pinning its hopes on First Horizon due to its footprint in the southeastern U.S.

It now plans to grown more organically, with plans to open 150 branches by 2027.

The bank reiterated its medium-term financial target of achieving adjusted earnings growth between 7% and 10%. It also forecast a dividend payout ratio between 40% and 50% and over 16% return on equity growth in the medium term.

TD shares are the worst performer among top Canadian banks, losing more than a tenth of their value in the first six months of the year. They were up about 1.5% in mid-day trading on Thursday.

(Reporting by Nivedita Balu in Toronto, editing by Deepa Babington)