TD Banknorth Inc. has replaced its CEO William Ryan. The news comes two weeks after rival Sovereign Bancorp Inc. sacked Jay Sidhu, its CEO. Both men who ascended to the top in 1989 turned modest savings banks into regional giants that now face off in the hotly contested banking marketplace of the Northeast Corridor between Philadelphia and Boston.
TD Banknorth named president Bharat Masrani to succeed Ryan, effective March 1. Masrani joined the Portland, Me.-based bank last month from its parent Toronto Dominion. Unlike Sidhu, who will be forced to retire, Ryan will remain chairman of the board of TD Banknorth until 2010 where he will continue to focus on the company's merger and acquisition strategy.
Interestingly, both built their institutions through acquisitions of smaller rivals. However, both men vaulted their institutions into the big leagues by buying the castoffs of big bank mergers. TD Banknorth's predecessor's first big deal was the acquisition of Shawmut branches that Boston's Fleet Financial was forced to divest in the mid 1990s. The two banks then came face-to-face when Fleet made its next big acquisition, the buyout of BankBoston. In the process, Reading, Pa.-based Sovereign bought 278 castoffs helping it expand into New England.
However, both banks were looking for additional capital to keep up the acquisitive pace, so both sold stakes to larger foreign banks. Banknorth sold a stake to Canada's Toronto Dominion, and Sovereign sold a stake to Spain's Banco Santander. Interestingly, it seems that these deals were their undoing, but perhaps for vastly different reasons. In the case of Ryan, who at 62 is getting close to retirement age, it seems the new parent maybe pushing him aside. In the case of Sidhu, it was not the foreign investor that showed him the door, but rather an angry shareholder, Relational Investors LLC, who opposed the Banco Santander stake sale. Relational successfully won a seat on the board, and in turn forced Sidhu to resign.
Nonetheless, both men's legacy will live on — until a bigger bank buys their creations. —Matthew Wurtzel
See story about Ryan from The Portland Press Herald
See story about Masrani from The Globe & Mail
See story about Sidhu from The Deal
See TD Banknorth Postmortem from The Deal
Continue reading below
