TD Bank CEO says plans are already in place for succession

TORONTO — From a U.S. money-laundering probe and the cancelled acquisition of First Horizon Corp in May, Canada’s TD Bank has faced turbulence that is making questions about who will succeed CEO Bharat Masrani top of mind for many investors.

The CEO told analysts on Thursday in a call, after TD reported its first quarterly profit beat in a year due to strong domestic business, that he is focused on the job.

“I’m focused. Every day I wake up, I’m focused on strengthening the bank,” Masrani told analysts.

“As you would expect, we have very detailed and robust succession plans across the bank.”

At 67, he is the same age as his predecessor, Ed Clark, when he retired. Jefferies analyst John Aiken said Masrani could soon “decide to call it a day and walk into the sunset for a well deserved retirement.”

The departure of Michael Rhodes in December, the Canadian retail operations head who was long seen as a potential CEO candidate, has left investors with new questions about Masrani’s eventual replacement.

Rhodes was replaced by Ray Chun, who joined TD in 1992 and has held top roles across its wealth management and insurance units.

Jefferies’ Aiken said that a lack of ready replacements for the CEO can create significant concern in the market, as its choices are not as wide as they once were due to notable turnover in its executive ranks in recent years.

“It doesn’t sound like he’s in a hurry to leave... (But) I think the board will probably want to accelerate the process,” said Brian Madden, chief investment officer at First Avenue Investment Counsel.

“I would say it’s more likely someone internal. It’s better for continuity.”

Analysts and shareholders expect Masrani to stay until the U.S. money-laundering probe is done, which some speculate will culminate in a hefty fine and tighter transaction controls at the bank.