TD Bank Group (TD.TO) on Thursday named Chief Financial Officer Riaz Ahmed chief executive of its securities unit and head of wholesale banking, a move some investors interpreted as a sign he will succeed CEO Bharat Masrani.
For Ahmed, 58, the change marks a return to his TD roots. He began his career at the bank in 1996 as an investment banker in the securities division, following which he served as its CFO and chief administrative officer. He has been part of TD Bank’s executive team for nine years, and CFO for over five.
“Cross-training in the capital markets role … increases the likelihood of (Ahmed) succeeding Masrani when he retires, but I doubt it would be soon, as that would create unnecessary turnover atop TD Securities,” said Brian Madden, portfolio manager at Goodreid Investment Counsel.
“Maybe Masrani announces his retirement next year (or the following) and leaves early in 2023” or 2024.
Masrani’s compensation arrangements anticipated his retirement in 2020, TD said in its 2019 shareholders meeting proxy circular. But he was granted stock options worth C$1.9 million ($1.5 million), vesting in five years, on the condition that he remain available to serve as CEO throughout that period.
Ahmed replaces Bob Dorrance, who will retire on Sept. 1 after about 16 years at the bank, Canada’s second-biggest lender by market value said in a statement.
When asked about TD’s succession plans, a spokesperson said: “Today we are celebrating Bob Dorrance’s incredible career and accomplishments, and the appointment of top executives to critical, leadership roles.”
At a time when diversity, particularly in executive and board ranks, has come under increased scrutiny, Ahmed’s appointment as CEO would mean TD, the only one of Canada’s six biggest lenders to have a non-Caucasian at its helm, would retain that aspect.
Ahmed’s appointment comes after TD’s wholesale banking unit recorded an 8% revenue decline in the second quarter from a year ago, contributing to the bank’s overall underperformance versus some rivals.
Kelvin Tran, currently executive vice president for enterprise finance, will replace Ahmed as finance chief.
Dorrance, who has headed TD Securities since 2005, will stay on as chairman of TD Securities and serve as special adviser to Masrani.
TD shares were flat at C$87.12 on Thursday afternoon, compared with a 0.2% gain in the Toronto stock index (.GSPTSE). The shares are up 21% this year, versus a 15% gain in the benchmark.
($1 = 1.2303 Canadian dollars)