TORONTO (Reuters) - The CEOs of Canada’s top two banks on Tuesday made clear they would not be stepping down in the immediate future, postponing any expectations of a generational shift in the country’s banking sector.
Speculation that the country’s large banks would soon be led by younger people began in earnest in October when Bank of Nova Scotia (BNS.TO), Canada’s No. 3 bank, named longtime executive Brian Porter as president, making him the heir apparent to Chief Executive Officer Rick Waugh. Porter is in his mid-50s.
Waugh assumed the bank’s top job in 2003, a year after Toronto-Dominion Bank (TD.TO) CEO Ed Clark and two years after Royal Bank of Canada (RY.TO) Gord Nixon, and analysts and investors have wondered since about succession plans.
Clark and Nixon aren’t in any rush to hit the golf course, they implied Tuesday.
“Invite me for next year and I’ll show up,” Clark, 65, quipped at the RBC Capital Markets Canadian Bank CEO conference when asked if he expected to be back in 2014.
Nixon, who has the longest tenure of the three, is also the youngest, and he gave no hint that he’s planning to step down.
“I have now been 12 years in this role, and at some point I think it is appropriate to turn it over and to move on. But I‘m only 55 and have some -- hopefully some runway left,” he said.
“It certainly won’t be into my mid-60s, I can assure you on that front.”
While Waugh, 65, is widely expected to step down within the year, he gave no hint of when that might happen. “We have a time in mind. We’re not disclosing it, but it’s not imminent. But I‘m on the downward slope,” he said.
Canada’s banking sector is dominated by five large lenders, which each have a sizable market share in retail banking, wealth management and investment banking. As such, succession at the top banks is watched closely.
Whenever the current crew of CEOs do step down, their successors will have big shoes to fill.
The banks navigated through the U.S. financial crisis relatively unscathed, and the sector has been named the world’s soundest five years running by the world Economic Forum.
Waugh and Clark have also presided over massive international expansions for their banks. Scotiabank has extended its presence in Latin America and Asia, while TD has built a U.S. retail bank that boasts more branches than its Canadian network.
“Strategically, the banks will have very viable growth platforms outside Canada, and that will be their principal legacy, in my opinion,” said Peter Routledge, an analyst at National Bank Financial.
Analysts say Bharat Masrani and Tim Hockey, who head TD’s U.S. and Canadian retail banks, respectively, have the inside track on the top job. At RBC, the picture is less clear.
The head of No. 4 Bank of Montreal (BMO.TO), Bill Downe, and the CEO of No. 5 lender Canadian Imperial Bank of Commerce (CM.TO), Gerry McCaughey, have only been in their jobs for six and seven years, respectively.
In terms of tenure, all five CEOs will have a tough time matching Larry Pollock, CEO of regional lender Canadian Western Bank (CWB.TO). Pollock will step down in March after 23 years at the bank. In that time the bank has turned a profit every quarter.
Reporting by Cameron French; Editing by Frank McGurty and Prudence Crowther