(Corrects length of Dorrance’s time at TD in sixth paragraph to 16 years from 40 years)
June 24 (Reuters) - TD Bank Group 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 become the next CEO, succeeding Bharat Masrani, whose retirement is already overdue.
The move is a return to his TD roots for Ahmed, 58, who 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, who had been expected to retire in 2020, was granted stock options worth C$1.9 million ($1.5 million), vesting in five years, on the condition that he remains available to serve as CEO throughout that period, TD said here in its 2019 shareholders meeting proxy circular.
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.
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 advisor to Masrani.
TD shares rose 0.2% to C$87.15, compared with a 0.3% gain in the Toronto stock index. They’re up 21% percent versus this year, versus a 15% gain in the benchmark. ($1 = 1.2303 Canadian dollars) (Reporting by Nichola Saminather in Toronto; Additional reporting by Noor Zainab Hussain in Bengaluru; Editing by Devika Syamnath and Nick Zieminski)