CorpDigest
The Toronto-Dominion Bank
Leadership History
3 leaders · Full leadership timeline
Last reviewed: 2025-07-15 · By Swet Parvadiya
CAD $67.78 billion in FY2025 revenue and $2.0 trillion in total assets make TD Bank Group the second-largest bank in Canada, but a $3 billion AML fine and a $434 billion asset cap on US operations have created the most significant crisis in the bank's 170-year history. Reported net income of CAD $20.54 billion includes an $8.98 billion gain from the Schwab sale, masking underlying profitability pressure from permanent compliance costs and restricted US growth. On an adjusted basis, net income was CAD $15.03 billion with a 12.9% return on common equity — solid but below the 15% target that management had set before the AML crisis. The market values TD at approximately CAD $155 billion, but the stock trades at a 1.35 price-to-book ratio, a discount to RBC and TD's historical average, reflecting investor concern about the duration of the asset cap and the permanent cost of compliance.
TD Bank Group generates revenue through four distinct business segments that collectively produced CAD $67.78 billion in total revenue for FY2025. The Canadian Personal and Commercial Banking segment is the profit engine, generating CAD $21.20 billion in revenue in FY2025 (approximately 31% of total), with net income of CAD $7.46 billion and a return on common equity of 31.4%. This segment serves personal banking, small business, and commercial clients through 1,051 retail branches, TD Canada Trust digital platforms, and TD Auto Finance Canada. Revenue flows from three primary channels: net interest income of CAD $16.70 billion (up 6% from FY2024), driven by loan growth and net interest margin expansion; non-interest income of CAD $4.50 billion from service charges, card services, and fees; and insurance revenue. The segment's net interest margin was 2.82% in FY2025, up from 2.80% in FY2024, reflecting the benefit of higher interest rates on the bank's deposit-funded lending book. The efficiency ratio of 41.1% is among the best in North American banking, reflecting the operating leverage of TD's dominant Canadian retail franchise. The average loan portfolio in this segment grew to CAD $593 billion, with residential mortgages representing the largest component, followed by personal loans and commercial lending. Customer deposits totaled CAD $398 billion, providing a low-cost funding base with a deposit beta (the percentage of rate changes passed to depositors) of approximately 55%, meaning TD retains 45% of each rate increase as margin expansion. The U.S. Retail segment generated CAD $15.74 billion in revenue in FY2025 (approximately 23% of total), with net interest income of CAD $12.37 billion and non-interest income of CAD $3.37 billion. This segment operates as TD Bank, America's Most Convenient Bank, with a network of branches primarily along the US East Coast from Maine to Florida. The segment's net income excluding the share of Schwab was CAD $3.72 billion on a reported basis and CAD $4.01 billion on an adjusted basis in FY2025. The US retail net interest margin was 3.15% in FY2025, benefiting from the higher-rate US environment. However, the segment is now operating under a $434 billion asset cap imposed by US regulators in October 2024, which prevents organic balance sheet growth and forces TD to shrink or restructure its US loan portfolio. The bank has identified certain US loan portfolios for sale or run-off under a balance sheet restructuring program. The Wealth Management and Insurance segment generated CAD $15.09 billion in revenue in FY2025 (approximately 22% of total), though this includes CAD $6.09 billion in insurance service expenses, making the net revenue contribution lower. The segment's net income was CAD $2.79 billion in FY2025, with a return on common equity of 43.1% in Q4 2025. Wealth Management alone generated net income of CAD $2.23 billion in FY2025, with assets under administration of CAD $759 billion and assets under management of CAD $601 billion. Revenue streams include management fees on AUA/AUM, net interest income on wealth lending products, and insurance premiums. The insurance business reported net income of CAD $562 million in FY2025, recovering from a loss of CAD $41 million in FY2024 that was driven by CAD $1.02 billion in catastrophe claims. The Wholesale Banking segment, which includes TD Securities and TD Cowen, generated CAD $7.99 billion in revenue in FY2025 (approximately 12% of total), with net income of CAD $1.80 billion on a reported basis and CAD $1.93 billion on an adjusted basis. The segment's return on equity was 15.0% in FY2025. Revenue is driven by trading-related revenue (CAD $3.47 billion in FY2025), corporate and investment banking fees (CAD $2.73 billion), and global markets activities. The TD Cowen acquisition, completed in March 2023 for $1.3 billion, added US equities capabilities, research, and investment banking advisory, with Cowen contributing approximately CAD $1.5 billion in annual revenue. The Corporate segment, which includes treasury activities, reported a net loss of CAD $1.34 billion in FY2025 on a reported basis and CAD $1.18 billion on an adjusted basis, reflecting funding costs, capital management activities, and the residual impact of the First Horizon termination strategy. The bank's overall revenue mix is approximately 49% net interest income (CAD $33.06 billion) and 51% non-interest income (CAD $34.72 billion), though the non-interest income figure is inflated by the $8.98 billion Schwab gain. Excluding this gain, the revenue mix is approximately 60% net interest income and 40% non-interest income, reflecting TD's traditional banking orientation. The bank's net interest margin was 1.88% in FY2025, down from 1.95% in FY2024, reflecting deposit margin compression as rates stabilized. The provision for credit losses was CAD $4.51 billion in FY2025, up from CAD $4.25 billion in FY2024, reflecting higher impaired provisions in both Canadian and US retail portfolios. The bank's efficiency ratio on an adjusted basis was 52.7% in FY2025, up from 51.8% in FY2024, with the increase driven by higher compliance costs and integration expenses. If the Canadian Personal and Commercial Banking segment's net interest income disappeared, TD would lose approximately 25% of its total revenue and its highest-margin, most stable income stream — the segment that generates a 31.4% return on equity and funds the bank's entire dividend.
Group President and CEO (2014-2025)
Masrani led TD for more than a decade, overseeing the Schwab strategic partnership, the Cowen acquisition, and the attempted First Horizon merger. He accelerated TD's digital transformation and expanded the US franchise. However, the AML failures 'took place on my watch' and he accelerated his retirement due to the crisis.
Group President and CEO (2025-present)
Chun became CEO on February 1, 2025, after 33 years at TD. His first major decision was the sale of TD's entire Schwab stake for approximately $14.6 billion, generating CAD $20 billion in proceeds. He is tasked with rebuilding regulatory trust and growing the bank within US constraints.
Group Head, Wholesale Banking and President and CEO, TD Securities (retired January 2025)
Ahmed led TD's wholesale banking expansion for nearly three decades, including the Cowen acquisition and the integration of TD Cowen. He retired at the end of January 2025 as part of the leadership transition.
The most immediate threat to TD Bank Group's margins and market position is the $434 billion asset cap on its US retail operations, imposed in October 2024 as part of the $3 billion AML settlement. This cap prevents TD from growing its US balance sheet through organic loan origination or acquisitions, forcing the bank to shrink or restructure its US operations while competitors like JPMorgan Chase, Bank of America, and PNC expand. The cap is expected to remain in place for at least three years, with regulators requiring TD to demonstrate sustained compliance improvement, enhanced transaction monitoring, and cultural transformation before considering its removal. In FY2025, TD identified certain US loan portfolios for sale or run-off under a balance sheet restructuring program, generating CAD $2.67 billion in balance sheet restructuring charges that hit the US Retail segment's results. The permanent compliance cost burden is equally damaging: TD has committed to spending over CAD $500 million annually on AML remediation, including hiring approximately 1,500 compliance professionals, upgrading transaction monitoring systems to detect suspicious patterns, and implementing enhanced customer due diligence protocols. These costs are not one-time charges but permanent additions to the operating expense base, compressing margins in a segment that already faces competitive pressure. The US Retail segment's efficiency ratio has deteriorated as compliance costs mount, and the segment's return on equity excluding Schwab was approximately 10.5% in FY2025, below the bank's overall target. The competitive landscape in US retail banking is intensifying: regional banks like Truist and US Bancorp are investing in digital capabilities, while fintech lenders like SoFi and Ally are capturing market share in auto lending and personal loans — segments where TD Auto Finance has historically been strong. TD's US branch network, concentrated in the Northeast and Mid-Atlantic, faces deposit competition from money market funds and high-yield savings accounts that offer rates well above TD's deposit offerings. The Canadian banking market, while more stable, faces its own pressures: the Canadian housing market has cooled significantly, with home sales down 15-20% from peak levels, reducing mortgage origination volumes. TD's Canadian residential mortgage portfolio of approximately CAD $280 billion is exposed to interest rate risk, as approximately 30% of mortgages are variable-rate and face payment shocks as rates reset higher. The bank's net interest margin in Canada, while stable at 2.82%, faces pressure from deposit competition and the potential for rate cuts by the Bank of Canada. The Wholesale Banking segment faces cyclical headwinds: M&A advisory fees surged in FY2025 but are expected to normalize, and trading revenue is volatile, dependent on market conditions. The TD Cowen integration, while progressing, has incurred higher-than-expected costs, with acquisition and integration-related charges of CAD $162 million in FY2025. The segment's return on equity of 15.0% is below the 18-20% target that management had set for the combined TD Securities/TD Cowen franchise. Regulatory risk extends beyond the US AML settlement: the Office of the Superintendent of Financial Institutions (OSFI) in Canada has tightened capital requirements for domestic systemically important banks (D-SIBs), requiring TD to maintain a CET1 ratio above 11.5% and potentially higher as Basel III reforms are implemented. The bank's CET1 ratio of 13.1% provides a buffer, but regulatory changes could absorb 50-100 basis points of capital. The leadership transition creates execution risk: Raymond Chun, while a 33-year TD veteran, has never led a bank through a crisis of this magnitude. His predecessor, Bharat Masrani, acknowledged that the AML failures 'took place on my watch,' and Chun must now rebuild relationships with US regulators who have lost trust in TD's management. The board has also been overhauled, with five directors retiring in 2025 and four new directors joining, creating governance transition risk. The sale of the Schwab stake, while strengthening capital, removes a strategic option: TD no longer has a US wealth management platform and must build organic capabilities or pursue partnerships. The bank's technology infrastructure requires significant investment to meet modern compliance and customer experience standards, with TD committing CAD $1.5 billion annually to technology upgrades. Cybersecurity risk is acute: as a systemically important bank, TD is a target for sophisticated attacks, and any breach could compound regulatory scrutiny. The global macroeconomic environment adds further uncertainty: a US recession would increase credit losses, reduce fee income, and pressure the bank's capital ratios. TD's exposure to commercial real estate, particularly in US office markets, creates potential for elevated provisions — the bank's US commercial real estate portfolio totaled approximately CAD $25 billion as of FY2025, with office exposure representing roughly 35% of that total.