TORONTO -- TD Bank Group has tapped the head of its U.S. banking operation to succeed Ed Clark as president and chief executive after an 18-month period intended to assure customers and investors a smooth transition.

Clark's successor will be Bharat Masrani, 56, who has headed TD's U.S. personal and commercial banking group since 2006. He'll move back to Canada to become the TD's chief operating officer starting July 1 and then CEO when Clark retires.

Clark, who has been TD's top executive for more than a decade -- years that marked significant growth for the bank while avoiding many potential pitfalls -- will be 67 when he retires on Nov. 1, 2014.

Until then, TD's senior managers, including its new No. 2 executive, will continue to report to Clark.

"Bharat has been my colleague and partner almost since the time of I arrived at TD. He helped reshape the risk appetite of the bank and was critical to many of our earlier decisions," Clark told analysts in a conference call after the announcement of Masrani's selection by the board.

"Most important of all, Bharat brings not only great business acumen and judgement to the job, but he shares all of our commitments to the culture and values of the bank."

Clark and Masrani said in a joint interview that a key factor behind TD's success is the team approach taken by its senior management as well as its focus on personal and commercial banking -- both in Canada and the United States.

Clark said "everyone has their own secret sauce but I would say the thing that people probably don't quite appreciate outside, as you would inside, is developing people, developing leaders, building teams is the core thing that we do."

"I think, for the company, it's very important for the team to stay in place -- the team that delivered this," Clark said.

"They're all excited this morning because they all, in a sense, got new jobs, new responsibilities and are quite jazzed by what they're going to do in their career under Bharat's leadership."

Masrani said TD has consistently outgrown other banks and taken market share and expects to continue to do so even while facing the challenges of a low interest rate environment, slow economic growth, high personal debt levels and an evolving global financial system.

"For the most part, as long as we are a growth company, we are able to withstand a lot of those headwinds. My expectation is that we will continue to do that, we will continue to take share," Masrani said.

The transition period for the two executives provides ample time for investors to prepare for the changes, said Barclays analyst John Aiken in a note.

"Ed Clark is well respected in the market and it is hard not to believe that his departure is not a net negative for TD," he wrote.

"That said, TD's bench strength remains quite strong and Bharat Masrani has done an exemplary job in growing the U.S. retail operations. With a reasonable transition timeline, we believe that Mr. Clark's departure will only be viewed as a modest negative. "

The announcement of Clark's retirement follows a move by Scotiabank last year to promote Brian Porter to the role of president, a move seen by many to position the former head of international banking as next in line for the bank's top job when current chief executive Rick Waugh decides to retire.

In addition to the appointment of Masrani to his new role, TD plans to reassign responsibilities among other senior executives.

Masrani's successor as head of the U.S. personal and commercial banking sector will be Mike Pedersen, TD's group head for wealth management, insurance and corporate services.

Tim Hockey, currently TD's head of Canadian banking, auto finance and credit cards, will add TD Wealth to his responsibilities in July.