As Bharat Masrani retires, TD Bank navigates US regulatory challenges and announces leadership changes
Bharat Masrani will retire as the chief executive of Toronto-Dominion Bank (TD) in April next year, after serving in the role for more than a decade, according to Financial Post.
Masrani’s retirement comes as the bank, Canada’s second largest, faces regulatory challenges. Recently, TD reported a rare quarterly loss after setting aside US$2.6bn to address expected fines related to anti-money laundering (AML) issues in the United States.
Additionally, TD was ordered to pay US$28m by US authorities for repeatedly providing inaccurate customer information to consumer reporting agencies.
TD’s board of directors has selected Raymond Chun, the current group head of the Canadian personal banking unit, as Masrani’s successor. As part of the transition plan, Chun will become chief operating officer on November 1 and report to Masrani until April.
After that, Masrani will take on an advisory role until November.
“Bharat helped to build TD over almost four decades, and as CEO, he led the bank through a period of profound change in our industry,” said Alan MacGibbon, TD’s chair, in a statement. “The board extends its deep appreciation for Bharat’s significant contributions to TD.”
The announcement follows intensified succession planning discussions, especially after the bank reserved US$2.6bn for the AML probe on top of US$450m set aside in April.
National Bank Financial analyst Gabriel Dechaine noted that succession would typically be expected with Masrani, 67, at the helm for a decade, but the bank’s US regulatory issues accelerated these discussions.
Bank of Nova Scotia analyst Meny Grauman observed that while Chun is a seasoned executive not directly linked to the US regulatory concerns, his relatively low-profile contrasts with the “outsider” candidate that many investors had anticipated.
Masrani expressed confidence in Chun’s leadership, stating, “We are navigating a difficult moment, and I am confident that Ray’s leadership will successfully guide this great institution into the future.”
In addition to Masrani’s retirement, TD announced further changes at the top. Riaz Ahmed, group head of wholesale banking and CEO of TD Securities, will retire by the end of January 2025 after nearly three decades with the bank.
Tim Wiggan, head of wealth management and insurance, will take his place. Paul Clark will move into the role of senior executive vice-president of wealth management, while Sona Mehta will become group head of Canadian personal banking.
Masrani has taken full responsibility for the AML challenges TD faces, saying that he will continue to lead the critical remediation program required to meet the bank’s obligations and strengthen its risk controls.
Chun, who joined TD’s management training program in 1992, has risen through various roles, including president of TD Direct Investing and CEO of TD Insurance.
He said, “I am honoured by the trust our board has placed in me. TD is a critical part of our financial system and economy... I am committed to the work ahead and energized by the opportunity to lead this outstanding bank into the future.”
During a conference call, Masrani described Chun as the “right leader at the right time” and emphasized Chun’s ability to build successful teams across TD’s business segments.
He added that external candidates were also considered, but the board chose Chun after a “lengthy and competitive” process.
