The only remaining chief executive of the five who steered Canada’s big banks through the financial crisis is retiring.

Bank of Montreal’s Bill Downe announced Friday that he is stepping down at the end of October, marking a final changing of the guard from that era.

His replacement is Darryl White, who has been chief operating officer since November and whose background is firmly steeped in the bank’s capital markets operations.
“We’ve been working together for two decades,” Downe said in an interview. “What I saw in Darryl as a young banker was an exceptional talent, both intellect and an ability to relate to clients… I’ve always had confidence that he was going to move to higher levels of responsibility.”

Before being appointed COO in November last year, White held key roles in his 22 years at the bank, including as group head of BMO Capital Markets, and has spent considerable time in the U.S. on the bank’s strategy and presence south of the border.

The Canadian investment banker’s promotion is no surprise after BMO’s management shuffle last October, in which White was named as COO, said John Aiken, an analyst with Barclays in Toronto.

Still, the appointment “breaks the trend of Canadian banks’ boards shying away from capital markets backgrounds for the corner office,” Aiken said in a note to clients Friday.

BMO
BMOBMO COO Darryl White, left, will replace CEO Bill Downe when he retires Oct. 31.

Toronto-Dominion’s chief executive Bharat Masrani, who stepped into his role in November 2014, had previously served as the lender’s group head of U.S. personal and commercial banking and as chief risk officer. Royal Bank of Canada chief executive Dave McKay was group head of personal and commercial banking when he was appointed to the lender’s helm in February 2014. CIBC CEO Victor Dodig, who took on the role in September 2014, had previously led the bank’s wealth management, asset management, and retail banking businesses.

Brian Porter, who took over as CEO of Bank of Nova Scotia in 2013, had been group head of both risk and international banking.

With rising concern about the mounting amount of debt consumers have taken on, particularly with the recent double-digit run-up of housing prices in the greater Toronto and Vancouver markets, experience in personal and commercial banking and risk management has been seen as an asset.

Downe said White is a “balanced professional,” with assignments that have exposed him to every part of the bank and across geographies, and he has been a member of BMO’s risk management committee for more than five years.

White says that while he has only had oversight over BMO’s personal businesses for the past fiscal year, he has long been tuned in.

“We’re in a good position… risk in particular, with respect to our personal businesses, we pay very close attention and we’re comfortable with where we are,” White said in an interview.

Downe will work closely with his successor to ensure a smooth transition when White takes the top job on Nov. 1, and will serve in an “advisory capacity for a brief period” afterwards, BMO said in a statement Friday.

Brian Klock, an analyst at Keefe, Bruyette & Woods, said in a note Friday he expects a “seamless transition” given their “long, productive relationship” while working together at BMO Nesbitt Burns.

Since stepping into the chief executive role in March 2007, Downe has guided Canada’s fourth-biggest lender through the financial crisis and deepened BMO’s reach into the U.S., doubling its footprint south of the border with its $4.1-billion acquisition of Marshall and Ilsley Corp. in 2010.

Downe said he sees his legacy as BMO’s adaptability and resilience “through every circumstance” and seizing “the opportunity to make acquisitions when others were reluctant to move.” He cited its purchase AIG’s Canadian Life Insurance Business in 2009 as well as Marshall and Ilsley Corp.

Klock says Downe was adept at targeting assets that added value without being overly risky.

He cited BMO’s 2015 purchase of General Electric Capital Corp.’s transportation finance business as a “nicely accretive deal.” But it was the Marshall and Ilsley buy that allowed BMO to jumpstart its U.S. operation, Klock said, which had languished despite its early entry among the Canadian banks with its purchase of Chicago-based Harris bank back in 1984, Klock said.

“They took the opportunity to jump in there and make a big splash and restart that… (Downe) did that and was able to grow the company outside of Canada, and do it in a way that didn’t bet the bank,” Klock said.

Financial Post