Toronto-Dominion Bank Chief Executive Officer Edmund Clark, who led Canada’s second-biggest lender in a $25 billion U.S. expansion, will retire in November 2014 after a dozen years in the post.
Clark, 65, will be succeeded by Bharat Masrani, currently head of U.S. operations, the Toronto-based bank said today in a statement. Masrani will become chief operating officer in July when he returns to Toronto.
“Ed Clark is well respected in the market and it is hard not to believe that his departure is not a net negative for TD,” said John Aiken, an analyst at Barclays Plc in Toronto. “That said, TD’s bench strength remains quite strong and Bharat Masrani has done an exemplary job in growing the U.S. retail operations.”
Masrani, 56, joined Toronto-Dominion in 1987 and held management positions including chief risk officer. He was charged by the bank in 2002 to help exit about C$11 billion ($10.9 billion) in corporate loans, which he reduced ahead of schedule. He was named head of the U.S. bank in 2006.
“He helped re-shape the risk appetite of the bank, and was critical to many of our earlier decisions,” Clark told investors today during a conference call.
Clark has run Toronto-Dominion since December 2002. He joined the lender in 2000 after it acquired Canada Trust’s parent CT Financial Services Inc., where he was president and CEO.
Under Clark, a self-described “old-fashioned banker,” Toronto-Dominion limited damages from the financial crisis, taking a fraction of the write-offs recorded by U.S. counterparts.
“Ed Clark has done a good job,” said John Kinsey, who helps manage about C$1 billion at Caldwell Securities Ltd. in Toronto. “Obviously his strength is in personal banking. At one stage, TD was the fifth of the five big ones and now it’s first or second, depending on how you measure it.”
Clark said his legacy at Toronto-Dominion will be on the team he’s built, as well as the customer-focused business model he brought from Canada Trust. The bank opened branches in Canada and the U.S. during the financial crisis, with longer hours of operation than competitors.
“Proving out that if you start with the customer and then go to the employees that serve the customer, then the shareholders will do very well,” Clark said today in a telephone interview. “I think that’s a pretty simple, but it’s a very powerful message.”
Toronto-Dominion fell 1.2 percent to C$83.43 at 4 p.m. in Toronto -- the biggest one-day drop since Dec. 6, and has a market value of about C$77 billion. The shares have fallen less than 1 percent this year and have posted an annual total return of about 15 percent under Clark’s tenure, the bank said.
Clark led a U.S. consumer-banking expansion that began in 2004 when the lender bought a 51 percent stake in Portland, Maine-based Banknorth Group Inc. Toronto-Dominion now has more branches in the U.S. than it does in Canada.
Clark, who was awarded C$10.9 million in compensation last year, orchestrated the bank’s sale of its TD Waterhouse brokerage to TD Ameritrade Holding Corp. in 2005.
Clark told investors at last year’s annual meeting that he was in his “final years” as CEO. He’ll remain a director until the 2015 annual meeting. The bank holds its shareholder meeting tomorrow in Ottawa.
Mike Pedersen, 52, head of wealth management and insurance, will take over Masrani’s U.S. role, while Tim Hockey, 49, head of Canadian consumer banking, will be responsible for wealth management in addition to his current role, the bank said. Riaz Ahmed, 50, becomes head of insurance and credit cards.
Other executives including Chief Financial Officer Colleen Johnston, 54, will have added responsibilities, while there will be no changes in leadership at the bank’s TD Securities unit, led by Robert Dorrance.