Discover Financial Services has named TD Bank Group executive Michael G. Rhodes its next chief executive officer and president. He is scheduled to start no later than March 6, the company said Monday.
Rhodes will succeed interim CEO John Owen, who took over in August when the credit card giant's
Rhodes has been group head of Canadian personal banking at TD Bank's Toronto headquarters since 2011, overseeing retail product delivery through all digital channels and a 1,000-branch network. Previously he led TD's North American credit card and merchant services division, and prior to that was group head of innovation, technology and shared services.
Earlier in his career Rhodes held senior leadership positions at Bank of America and MBNA America Bank, and over the years Rhodes has worked in the United Kingdom, Spain and Ireland as well as in North America.
When he assumes leadership of the $143 billion-asset firm next year, Rhodes' priority will be restoring stability to the firm after a series of problems that snowballed this year and culminated in Hochschild's ouster.
Problems centered on recurring issues around servicing Discover's student loan portfolio, which the Consumer Financial Protection Bureau flagged repeatedly beginning in 2015 and resulted in costly fines. This year the
Discover last month said it
"Michael's appointment follows a comprehensive search process to identify the right leader to help the company deliver on its strategic and financial goals. He is an experienced executive and proven leader who has worked in a variety of roles within the payments and banking industry around the globe," Tom Maheras, chairman of Discover's board, said in the release.
Rhodes appears to be a "strong strategic fit" for Discover due to his experience at a large bank and expertise navigating diverse competitive and regulatory issues, analysts at RBC Capital Markets said in a Monday note to investors.
"That being said, the company still faces a number of headwinds and strategic changes ahead," the analysts wrote, noting that Rhodes' top priorities should be addressing Discover's various compliance and risk management issues, favorably disposing of the student loan business and resuming Discover's share repurchase program, which has been on hold since July.
Discover has a strong track record with leaders who were alumni from MBNA, a credit card firm specializing in affinity cards branded with the names of colleges and universities, hobbies and charities that became one of the largest U.S. card issuers in the 1990s.
Hochschild spent four years at MBNA in the marketing department early in his career before joining Discover in 1998, where he ultimately spent 25 years as he rose up the executive ladder. Hochschild's predecessor, David Nelms, who was Discover's CEO from 1998 to 2018, joined Discover in 1998 from MBNA, where he spent seven years, rising to vice chairman.
Rhodes spent a decade at MBNA, serving as chief marketing officer and rising to vice chairman and chief marketing officer before BofA acquired it.
