Toronto-Dominion Bank has now set aside a total of US$3 billion to cover a global settlement of criminal and civil investigations into shortcomings in anti-money laundering (AML) controls in the United States, which is likely to turn attention to a plan to replace chief executiveBharat Masrani.
“Succession questions have become even more intense because of the bank’s U.S. regulatory issues,” National Bank Financial analyst Gabriel Dechaine said in a note on Wednesday, suggesting that, under normal circumstances, succession would already be in motion with Masrani, 67, having spent 10 years at the helm.
“Providing clarity (if not certainty) of the direct financial consequences ‘clears the deck’ for a potential successor,” he said.
TD on Wednesday said it is setting aside US$2.6 billion for expected fines from the AML probe, which is on top the US$450 million it set aside in April.
But replacing Masrani may not be an easy task, with top contenders having left the bank before and after the money laundering probes were revealed more than a year ago.
Michael Rhodes, who was presumed by some company watchers to be the CEO-in-waiting, left the bank last December, giving up his job as head of TD’s personal banking business to become chief executive at Discover Financial Services.
Teri Currie, Rhodes’ predecessor, was also considered CEO material before her unexpected retirement in early 2022. Another TD executive, Katy Boshart, left in April to become chief executive at Manulife Bank and former TD Ameritrade chief executive Tim Hockey, long touted as a candidate to lead the bank, left in February 2020.
Despite the succession uncertainty, Dechaine said investors could respond to news of a pending global settlement of the
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