Dive Brief:

• TD CEO Bharat Masrani will retire April 10, and Canadian personal banking head Raymond Chun will succeed him as the bank’s next CEO, the lender said Thursday.
• “We are navigating a difficult moment, and I am confident that Ray's leadership will successfully guide this great institution into the future,” Masrani said in a news release.
• After Chun takes the reins as CEO, Masrani will serve as an adviser to the bank until Oct. 31, 2025, TD said.

Dive Insight:

TD, Canada’s second-largest lender, has faced pressure recently to provide details on its succession plans, particularly as it tackles its anti-money laundering issues amid a U.S. Justice Department probe. 

Masrani has been at the bank 38 years, spending about a decade as CEO.

“The anti-money laundering challenges we face took place on my watch as CEO and I take full responsibility,” Masrani said in the release. “In the coming months, I will continue to advance and direct the critical remediation program required to meet our obligations and responsibilities and strengthen our risk and control foundation.” 

“In line with TD Bank Group's succession plan,” the release noted, Chun will be appointed to the board of directors and become the bank’s chief operating officer, reporting to Masrani, effective Nov. 1. Chun will assume responsibility for all of TD's lines of business.

Then, on April 10, 2025, at the bank’s annual shareholder meeting, Masrani will leave the CEO post and Chun will fill the role, the release said. Masrani said the bank has a “strong bench of senior leaders and will execute a smooth and seamless CEO transition.”

Masrani “accelerated our transformation in the digital age, enhanced the competitiveness of our businesses, nurtured one of the world's most valuable brands, and steered TD through complexity with a steady hand," said Alan MacGibbon, TD’s board chair. “The Board extends its deep appreciation for Bharat's significant contributions to TD.”

Chun, TD’s head of Canadian personal banking since December, has been at the bank for more than three decades. He joined TD's management training program in 1992 and has taken on increasingly senior roles since then, including president of TD direct investing, CEO of TD Insurance and head of wealth management and insurance, TD said. He became head of Canadian personal banking when Michael Rhodes left TD to become CEO of Discover. Rhodes later left Discover to lead Ally amid the card network’s pending acquisition by Capital One.

MacGibbon pointed to Chun’s “long track record of success across multiple leadership roles.”

“His proven ability to drive change, deliver outcomes, and build strong, high-performing teams will serve him well as he guides TD into the future,” MacGibbon said.

For his part, Chun said he’s “committed to the work ahead,” according to the release. The lender, which has set aside about $3.57 billion for estimated penalties and fines, expects “a global resolution” on the AML matters by the end of this year. 

Additionally, Riaz Ahmed, head of wholesale banking and CEO of TD Securities, will retire at the end of January, the bank said. Tim Wiggan, a longtime TD Securities executive who took over the bank’s wealth management effort in December, will succeed Ahmed, the bank added.

‘Lengthy and competitive process’

During a Thursday conference call to discuss the leadership changes, analysts tried to suss out Chun’s experience with thorny issues and how that might inform his ability to oversee the resolution of the bank’s AML woes.

Bank of America analyst Ebrahim Poonawala noted that recent chatter suggested none of TD’s business leaders were quite ready to take the CEO post. Masrani and Chun defended Chun’s experience.

“Ray has delivered in every single role in his over 30 years at the bank,” Masrani said. 

During his time at the bank, Chun has led regions, product teams and operations, and grown businesses across the company, Masrani noted. “He’s led critical business segments at TD and has deep retail banking experience, which is important to TD now and into the future.” 

Chun “is the right leader at the right time,” Masrani assured analysts. He tied the April transition to TD’s annual group management conference in Toronto. 

Chun sought to highlight his experience in various segments of the business, overseeing both sides of the balance sheet and working with risk and control partners across the bank. As CEO of TD’s insurance unit, Chun gained a view into the entirety of a business and exposure to risk, he noted.

“When you’re running these large, complex businesses that I've run, running into complexity, and dealing with regulators, and mapping out complex strategies as we move forward, has all been sort of in my experience,” Chun told analysts.  

Asked whether the bank considered outside candidates for its next CEO, Masrani noted much of the board’s process is confidential, but “absolutely, we considered the external market,” he said. “Any strong process would.”

In considering the profile of the CEO TD needed next, the bank identified skills and qualities the organization could use in the short, medium and long term, Masrani said. An independent consultant helped the bank’s board, he added, and Chun was chosen after a “lengthy and competitive process.” 

AML work

During Thursday’s call, Masrani said the bank wouldn’t provide any update on the U.S. AML investigation. Masrani acknowledged that the U.S. AML deficiencies “were serious, and our significant remediation work is underway.” 

In the coming months, Masrani said he’ll continue to advance and direct the remediation required to meet the bank’s obligations and strengthen its risk and control foundation, “supporting [TD’s U.S. CEO] Leo [Salom] and Ray in that endeavor,” he said.

Chun called the AML issues “a significant challenge” for the bank, but said the lender has the team in place “to strengthen its foundations” and overcome its problems.  

Post-April plans

Executives were also asked if Chun’s appointment meant the bank is less focused on the U.S. in the years to come, given that his background has been more Canada-centric. Masrani insisted that’s not the case for TD, saying Chun and Salom plan to work closely in the years ahead, and the two have a strong working relationship. 

Still, as the bank wades through its AML issues, its U.S. growth plans have “slowed dramatically,” Masrani acknowledged recently. 

Suggesting Chun has little time to get up to speed before April, an analyst asked Masrani if he’ll be heavily involved until October 2025. Masrani replied that he’ll “be available to Ray and the bank in any capacity that I’m required post-April the 10th. So, we’ll see what needs are important, where I can add value.” 

That will be “up to Ray and the bank, to take advantage of my time as adviser,” he added.