Toronto-Dominion Bank, the Canadian lender that spent about $17 billion building a branch network from Maine to Florida, will rely on internal growth over acquisitions to expand in the U.S., incoming Chief Executive Officer Bharat Masrani said.

"We now have the sufficient scale that we need," Masrani said of Toronto-Dominion's U.S. operations. "The good thing is that, for our U.S. business, we don't have to buy any more."

Masrani, who becomes CEO tomorrow, is setting a different path than predecessor Ed Clark, who in 12 years transformed Toronto-Dominion into Canada's largest bank with more branches in the U.S. than its home country. Masrani said he'll build up the wealth business in both countries and woo more U.S. customers with savings accounts, credit cards and mortgages.

"We're not as mature in our U.S. business as we might be in Canada, so just penetrating basic banking products for our customers would be huge progress," Masrani, 58, said in an Oct. 21 interview at the bank's Toronto headquarters.

Toronto-Dominion's U.S. retail operations, which includes wealth management, posted an 8.7 percent return on equity this year, lagging behind the 42 percent return of its Canada banking business.

"Eight, nine years ago TD had zero presence in the retail space in the U.S. and now we're a Top-10 bank," said Masrani, who was born in Uganda to Indian parents.

Toronto-Dominion expanded under Clark with takeovers, starting with its 2005 purchase of 51 percent of Portland, Maine-based Banknorth Group Inc. TD bought the rest of Banknorth two years later and in 2008 bought New Jersey lender Commerce Bancorp Inc. The firm expanded to the U.S. Southeast in 2010 by acquiring South Financial Group Inc. and three Florida-based banks.

"The level of activity that you saw, absolutely made sense," Masrani said. "The good thing now is we have more than 1,300 locations in the United States. We essentially have all of the products that we want to compete in."

Masrani, who spent six years overseeing the bank's U.S. operations, isn't ruling out more U.S. takeovers. Any deal must make strategic sense and help with his objective of accelerating "organic growth opportunities," he said.

Masrani, a sports nut and cricket fan with an MBA from York University's Schulich School of Business in Toronto, began his career at the bank in 1987 as a commercial lending trainee.

He became head of TD Waterhouse Investor Services in Europe in 1999, running the bank's discount brokerage in the U.K. His efforts there caught the attention of Clark, who joined the bank with its 2000 takeover of Canada Trust parent CT Financial Services Inc.

After stints as country head in India and overseeing corporate banking in Canada, Masrani was promoted to chief risk officer in May 2003. He became president of TD Banknorth in September 2006 and CEO of the U.S. lender in March 2007.

Masrani became group head of U.S. personal and commercial banking a year later, overseeing an expanded U.S. lender renamed TD Bank after the firm bought Cherry Hill, New Jersey-based Commerce Bancorp. Masrani was appointed chief operating officer and called back to the Toronto headquarters when Clark announced his retirement in April 2013.

Clark leaves "big shoes to fill" and a huge legacy to follow, Masrani said. He said he doesn't see the need to put his own stamp on the bank, given how closely the two men worked together.

"I've been very much a part of the major changes that we've made over the last 10, 12 years," Masrani said. "I feel like such an equal partner of what you see today, so there's no compulsion for me to change for the sake of changing."

Toronto-Dominion gained 9.4 percent this year, compared with the 9.7 percent return of the eight-company Standard & Poor's/TSX Commercial Banks Index. The KBW Bank Index of 24 U.S. lenders has advanced 2.8 percent this year.

Clark said last month Masrani will face "more general" challenges than what he faced in his tenure, which was characterized by 14 percent annual stock returns, record profits and a favorable economy until cooled by the financial crisis.

"I don't think he's going to have the economic environment that I had," Clark said. "Growth will be slower, interest rates will be lower and regulatory demands higher. That's just the reality he faces, so he'll be eking it out more."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.