By Paul O’Donoghue, Senior Correspondent
TD Bank has confirmed that its CEO Bharat Masrani will retire on April 10.
Raymond Chun, TD’s head of Canadian personal and commercial banking, will become the company’s new CEO.
Mr Chun will become chief operating officer on November 1 and then take over as CEO and group president on April 10, 2025. Mr Masrani will “continue to serve as an advisor” to TD until October 31, 2025.
TD also said Riaz Ahmed, the head of its capital markets unit TD Securities, will retire in January.
The move comes just weeks after TD Bank revealed it had set aside $3 billion to cover a range of expected AML-related fines at its U.S. division.
Mr Masrani said he had to account for the controversey.
“The anti-money laundering challenges we face took place on my watch as CEO and I take full responsibility,” he said in a statement published by TD Bank.
“We have a strong bench of senior leaders and will execute a smooth and seamless CEO transition.”
Mr Masrani joined TD Bank as a commercial lending trainee trainee in 1987. He was named as CEO-designate of TD in 2013, assuming the position of president and CEO in 2014.
TD’s new CEO Mr Mr. Chun previously ran the company’s wealth management and insurance arm. He has been with the bank for 32 years.
The change in CEO had been widely expected as the scale of TD Bank’s AML problems have become apparent.
The incoming penalties are due to a series of AML problems across its U.S. network. Mr Masrani took the top job in November 2014 at a time the bank was in rapid expansion mode and focused on the U.S. market.
The lender now has about 1,150 branches on the east coast, more than it has across Canada.
The bank last year ran into trouble with the U.S. government, including the Justice Department, for weakness in its anti-money laundering protocol, after TD terminated its $13.4 billion acquisition of Tennessee-based First Horizon that would have grown its network in the southwestern United States.
The U.S. regulatory investigations relate to allegations that Chinese drug traffickers used TD to launder at least $650 million from 2016 through 2021 and that an employee took a bribe to facilitate laundering of drug money.
TD has admitted that its AML defences have been deficient. It previously admitted that its U.S. AML program did not “effectively thwart” criminal activities.
In April, TD Bank anticipated it would pay just $450 million in AML penalties. This amount soared to $3 billion by August.
The company is aiming to resolve most of its AML criminal investigations by the end of the calendar year.
TD also today announced a slew of executive changes.
Paul Clark will head its Wealth Management unit, Sona Mehta will take Chun’s role as head of Canadian personal banking and Tim Wiggan will replace Ahmed as head of TD Securities.
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