06:36 AM EDT, 09/20/2024 (MT Newswires) -- TD announced Thursday that chief executive officer Bharat Masrani intends to retire on April 10, 2025. Raymond Chun, Group Head, Canadian Personal Banking, will become chief operating officer from November, and become CEO when Masrani retires. Bharat Masrani will continue to direct the critical remediation program and strengthen TD's risk and control foundation surrounding its U.S. Bank Secrecy Act (BSA)/anti-money laundering (AML) concerns. He will stay on as an advisor until October 31, 2025.

Though positive about the appointments, RBC is surprised that Chun was chosen to be the next CEO. It is not "very familiar" with Chun or many of the executives who were elevated into new roles, but acknowledges that familiarity with executives is not particularly relevant today. "It takes time for analysts and investors (even bank employees) to understand a CEO's strategic vision and assess their ability to inspire a bank's workforce to execute on that vision," RBC says.

Chun may also need to change TD's culture and make some big strategic decisions regarding its U.S. businesses, RBC adds.

There will be further disclosure regarding TD's ultimate monetary and non-monetary penalties with respect to its U.S. BSA/AML issues, and "while we suspect they will be significant and costly, we believe TD can manage its way through it and still provide solid relative growth over the foreseeable future."

Maintain Outperform, $88 target.