UPDATE 4-TD shakes up top cadre after surprise exit of potential CEO Rhodes
(Recasts headline, first paragraph; adds TD CEO comment and share performance)
By Arasu Kannagi Basil and Nivedita Balu
Dec 11 (Reuters) - TD Bank Group on Monday named insider Ray Chun as the new head of its Canadian personal banking business after the surprise exit of Michael Rhodes, long seen as a possible CEO at Canada's No. 2 lender.
Rhodes, an industry veteran, was tapped by Discover Financial Services as its new CEO, replacing John Owen who has been serving as its interim CEO after Roger Hochschild stepped down in August.
Rhodes, who wrapped up 12 years at TD, was viewed by the investment community as a potential successor to current CEO Bharat Masrani, 67, who is nearing the 10-year mark in the top job.
"It's a surprise," said Anthony Visano, head of investment research at Kingwest and Co. "He seemed like he was primed for more things that were bigger things at the bank."
Chun, who joined TD in 1992, takes over TD's biggest division by revenue and net income with about 13 million customers at a time when higher interest rates have slowed credit growth, and TD, like many other banks, is bracing for rising bad debts. Most recently Chun ran the bank's wealth management and insurance unit, which will now be led by Tim Wiggan.
Wiggan joined TD in 2000 when it bought Newcrest Capital and later joined TD Securities in 2017.
Chun brings a deep understanding of the market and a relentless focus on the customer to his new role, Masrani said in a statement.
Last week, TD appointed new co-leads and hired six bankers for its global financial institutions investment banking team.
TD has had a tumultuous year in which the bank called off its proposed $13.4 billion takeover of U.S.-based First Horizon in May, shortly after disclosing a U.S Justice Department probe into TD's anti-money laundering practices. Faced with slowdown, TD last month said it plans to shed about 3% of its workforce, axing about 3000 jobs, announcing the deepest cut among Canada's top six banks this year.
TD has sought to grow its U.S. business organically after the First Horizon setback and has opened several offices in recent months. The bank last month missed fourth-quarter profit estimates as it set aside bigger-than-expected funds to cover for potential sour loans.
TD shares are down 6.7% this year, compared with a 4.8% rise in the benchmark Canada share index. (Reporting by Arasu Kannagi Basil in Bengaluru and Nivedita Balu in Toronto; Editing by Richard Chang and Christopher Cushing)
