Absa has all but told us its next CEO will be from outside the bank. Interim CEO René van Wyk will be in place for “no more than a year” according to Absa Group chair Wendy Lucas-Bull, who has described the process to appoint a permanent CEO as one that is “underway”. Quite how it landed itself in this mess is another story entirely.
The Registrar of Banks will always have strong ‘reservations’ about a candidate who isn’t a seasoned banker (in fact, the Banks Act stipulates this as a requirement). And given the rather limited pool of talent in the country, this person will likely need to resign from their position soon as there will almost certainly be a restraint of trade in place (six to 12 months). The announcement will be no later than August, it seems. This surely guides the timing shared by Lucas-Bull.
No clear succession plan, by definition, invites speculation.
It isn’t as simple as saying that the new boss won’t be an ‘Old White Guy’, but the truth is there aren’t too many inspired choices around or available (especially with former Absa deputy CEO David Hodnett out of the picture). Market talk is that the appointment will most likely not be a white male.
Absa needs to find a leader who will run the group for the next six or seven years, which means they need to be in their early fifties (or late forties).
And there’s the balance to be struck between finding someone who is a safe pair of hands and someone who is capable of actually turning Absa around, instead of talking about doing so.
Business Times suggested last week that, given the tendency of Absa to look to Standard Bank for “important appointments”, Lungisa Fuzile (aged 53) could be in the frame.
Fuzile, of course, is the former director-general in the Treasury, and this would mirror the path followed by Ramos, who herself held the DG post until 2003. Fuzile knows the market and banking very well, given that he ran the single most important department in government for six years (many of those during the height of the State Capture period). But as the paper correctly points out, he’s only been at Standard Bank (as CEO of Standard Bank South Africa) for a year, since January 15, 2018.
It is surely doubtful that Fuzile himself would want to abandon Standard Bank after just over a year? Besides, his choice of next role (after Treasury) was not rushed, suggesting that this would be his last ‘big job’ before retirement.
The paper also mentions former Standard Bank executive Kennedy Bungane (aged 43) as another option. Bungane was appointed deputy CEO of the South African corporate and investment banking business aged just 33 (recall that Sim Tshabalala was made CEO of SBSA at age 40), and within a year went on to run the unit. Thereafter, he ran Absa Group’s Africa unit (back then confusingly called Barclays Africa) and was its head of Africa Strategy, reporting directly to Ramos.
He left in 2014 to run Phuthuma Nhleko’s Phembani Group, with interests in energy, mining and infrastructure (as well as Shanduka’s interests spanning telecoms, financial services, property, industrial and consumer sectors).
Both would be solid choices. Bungane would be an exceptional one if he can be coaxed back to banking.
There aren’t too many other obvious choices if one glances across the Standard Bank exco. Zweli Manyathi, CEO of Personal and Business Banking, would be another (he previously ran the Africa division of the same unit and has held several senior roles across the group), but his age (56) likely doesn’t count in his favour.
One school of thought that exists in the market is that Absa may look to Nedbank for talent. And given the strong pool of black executives the bank has groomed over the past decade, that wouldn’t be a surprise.
Two candidates jump out across the group exco: Mfundo Nkuhlu (51) and Ciko Thomas (48).
Nkuhlu, the chief operating officer, is responsible for its central clusters as well as the Rest of Africa business. Prior to Nedbank, he was an executive at Sars and has held a senior position at the department of trade and industry.
Thomas has a marketing background and has headed up retail and business banking since 2016. He’s worked in the consumer goods, motor, and financial services industries (and earlier in his career was GM of Retail Banking Marketing at Absa).
However, the question is whether Nkuhlu or Thomas would even consider an advance from Absa given the obvious succession opportunities at Nedbank itself (Mike Brown will have been CEO for nine years in March).
As far as ‘outliers’ go, Business Times speculated last week that Francois Groepe, who recently resigned as deputy governor at the Reserve Bank, is one such possibility. Groepe doesn’t seem a realistic option, on paper at least.
There is also Nedbank CFO Raisibe Morathi, who could be considered a left-of-centre choice. So, too, Kenny Fihla who is CEO of Standard Bank CIB (corporate and investment banking). Fihla took over from David Munro in 2017, following the latter’s ‘secondment’ to Liberty.
There is one name that not a soul has mentioned, not in market-chatter or in formal speculation: Ingrid Johnson. Johnson turned around Nedbank’s retail and business banking division from 2009 and left (rather abruptly) to become the group finance director at Old Mutual plc. With the managed separation of ‘big green’ all but complete, Johnson – and CEO Bruce Hemphill – will both be without jobs soon (by design).
Johnson, like Bungane, would be an exceptional choice, based on her track record thus far.
One can’t help but get the feeling, however, that the succession processes at Absa Group and Nedbank Group could be more intertwined than anyone thinks …
* Hilton Tarrant works at YFM. He can still be contacted at firstname.lastname@example.org.