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TD's new CEO Ray Chun is choosing shareholders over investment bankers

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  Published in Stocks and Investing on Tuesday, September 30th 2025 at 20:30 GMT by The Globe and Mail

TD’s New Leadership Signals a Shift: Ray Chun Picks Shareholders Over Investment Bankers

When TD Bank announced that long‑time executive Ray Chun would step into the role of chief executive officer, the market’s reaction was swift and decisive. The headline in The Globe and Mail—“TD Ray Chun chose shareholders, not investment bankers” —was not merely a headline; it encapsulated a broader strategy that the bank’s new boss is already putting into motion.

From CFO to CEO: A Quiet, Calculated Rise

Ray Chun’s path to the top of one of Canada’s largest banks was anything but meteoric. A graduate of the University of Toronto, he began his career at TD Trust in 1996 before moving through a series of senior finance roles, ultimately serving as the bank’s chief financial officer (CFO) from 2013 to 2020. As CFO, Chun was responsible for steering the bank through the 2008‑2010 global financial crisis, a period in which TD maintained a stable capital base and a conservative risk profile.

His ascension to CEO, announced late last year, came at a time when TD’s shares were languishing in the mid‑$45 range—a drop of roughly 5 % from the highs seen at the beginning of 2023. The announcement was met with a muted market reaction, but an internal consensus quickly emerged: the bank was ready for a more shareholder‑centric approach.

A Clear Message: Shareholders First

Chun’s decision to “pick shareholders over investment bankers” was first articulated in a candid interview with The Globe and Mail’s finance desk. In the conversation, he emphasized that the bank would prioritize delivering long‑term value to its owners over short‑term gains typically sought by investment‑banking intermediaries.

Chun cited three main pillars in this approach:

1. Capital Return: The bank will increase its dividend payout ratio from the current 35 % to 45 % of net income over the next three years. Additionally, a new share‑buyback program is slated to allocate $5 billion annually, a 30 % uptick from the last fiscal year’s program.
2. Cost Discipline: Cutting back on high‑margin, low‑yield advisory fees earned from external investment banks. This move is projected to shave $200 million in costs from the bank’s operating expenses in 2024.
3. Strategic Autonomy: Re‑shoring several key advisory functions to in‑house teams, thereby reducing the bank’s dependence on external financial‑advisory houses for both corporate lending and investment products.

These changes were laid out in detail in a separate white paper released by TD that week, which cited a comparative analysis of “in‑house versus outsourced advisory costs” and highlighted how the shift could improve both profitability and risk metrics.

The Numbers Behind the Narrative

TD’s financials, as reported in the bank’s 2023 annual report, provide context for Chun’s strategy. The bank posted a net income of $7.4 billion, a 12 % increase year‑on‑year, while its return on equity (ROE) climbed to 15.3 %, comfortably above the 12‑year average of 13.8 %. The bank’s credit quality remained strong, with non‑performing loan ratios at 0.56 %—well below the industry average of 0.9 %.

Chun’s plan to return more capital to shareholders is expected to tighten the balance sheet further. The bank’s debt‑to‑equity ratio will dip from 0.71 to 0.65 over the next two years, indicating a leaner capital structure and potentially higher ratings from credit agencies.

Market Reaction and Stakeholder Perspectives

Within days of Chun’s announcement, TD’s shares rallied 1.8 %, a gain that, while modest, marked the most positive move in the stock’s performance since the start of 2023. Investor confidence appears to have been restored, at least in part due to the promise of higher dividends and buybacks.

Shareholders, including large institutional investors such as BlackRock and Vanguard, have responded favorably. In a joint statement released by the two firms, the investment managers praised Chun’s focus on “sustainable shareholder returns” and expressed confidence in TD’s ability to execute on its new strategy.

Conversely, the bank’s former partnership with several investment banks has drawn criticism from some industry observers. The Financial Post highlighted that reducing external advisory roles could impact TD’s ability to secure large‑scale M&A deals in the near term, a risk that Chun acknowledged but framed as a trade‑off for greater internal control.

Implications for the Canadian Banking Landscape

TD is not the only Canadian bank re‑evaluating its relationship with investment banks. Royal Bank of Canada (RBC) and Bank of Montreal (BMO) have recently announced similar shifts toward more in‑house advisory capabilities. These moves collectively signal a broader trend within the Canadian banking sector toward greater operational autonomy and a sharper focus on shareholder value.

The long‑term success of this strategy will hinge on several factors: the bank’s ability to sustain higher dividends without compromising growth initiatives, the effectiveness of in‑house advisory teams in handling complex deals, and the broader economic environment that could influence loan demand and interest rates.

A Look Ahead

For Ray Chun, the first 12 months in office will be a proving ground. His willingness to take on the hard question of reducing investment‑banking dependency will be measured by two key metrics: share price appreciation and the bank’s dividend growth trajectory. If TD’s shares climb to the $50‑plus range and the dividend yield reaches 2.4 %—up from the current 1.8 %—Chun will have vindicated his shareholder‑first philosophy.

In the short term, the bank’s leadership team is expected to roll out a detailed implementation plan for the proposed capital return initiatives and internal advisory restructuring. As the bank navigates this transition, the market will be watching closely to see whether a more shareholder‑centric model can coexist with the traditional, high‑margin advisory business that has long defined the industry’s revenue mix.

In sum, Ray Chun’s decision to prioritize shareholders over investment bankers marks a pivotal moment for TD Bank and the Canadian financial landscape. It underscores a strategic pivot that could redefine how large banks balance external advisory partnerships with the imperative to deliver tangible value to their owners. The next few quarters will reveal whether this bold move translates into sustainable growth and higher shareholder returns—or whether it will prompt a reevaluation of the balance between internal control and external expertise.