Absa shakes up the way it operates
• Bank wants to get ‘closer to customers’ while enhancing transformation in the upper ranks
Absa’s new CEO, Arrie Rautenbach, played his first major hand on Thursday, announcing a shake-up of the bank’s operating model along with a raft of executive changes designed to bring the senior leadership closer to its client-facing businesses.
The changes unveiled by Rautenbach, an Absa stalwart who took the reins of SA’s fourth-biggest bank towards the end of March, will see Absa move from two business clusters to five in a process that also involves reshaping the executive committee (exco) to boost transformation credentials.
Absa said the changes, effective from Friday, were a continuation of the major strategy overhaul announced in 2018, which was designed to put the bank on a more secure “growth path” in the increasingly competitive SA banking market.
The 2018 strategy change also involved a major brand refresh, dubbed “Africanicity”, which was partly influenced by Absa’s separation from UK lender Barclays.
“There was a key inflection point for us when we announced the new strategy going into 2018. It’s very clear today that strategy was absolutely the right strategy,” said Rautenbach. “It set our whole organisation on a completely different performance trajectory. We are reconfiguring group exco to create an organisation that is closer to customers.”
Rautenbach told Business Day that after weathering the effects of Covid-19, Absa’s senior executive team “took a step back” in 2021 to re-evaluate the strategic refresh announced in 2018, coming to the conclusion that it was “still very applicable”.
Nevertheless, it decided to be more deliberate about executing that strategy in a process it has dubbed its “next horizon”.
The acceleration will see it intensify efforts to get closer to its clients while also stepping up the focus on new areas such as environmental, social and governance issues, transformation and being a force for good in society.
“Through the changes were ’ making now we believe we will really take a step closer to cus
tomers,” said Rautenbach. “We can also be more deliberate in making some real changes when it comes to transformation and inclusion.”
The main structural change will see Absa move from its two previous commercial business units, namely retail and business banking (RBB) and corporate and investment banking (CIB) to a five-pillar model. While the CIB cluster will remain unchanged under the leadership of Charles Russon, it will now be known as CIB Pan-Africa.
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Added to that will be four new business clusters: relationship banking, everyday banking, product solutions and RBB ARO (Absa regional operations), which covers the retail banking business in the rest of Africa.
The biggest executive change will see Punki Modise, a more than 14-year veteran of the bank and current interim CEO of the strategically important RBB unit, become group chief strategy and sustainability officer, which is part of the bank’s exco team.
Key leaders in the former RBB business unit have also been appointed to exco roles. They include Faisal Mkhize, who will be responsible for relationship banking, and Cowyk Fox, who will head everyday banking. Geoffrey Lee will lead the new product solutions cluster, which will cover home and auto finance as well as insurance and other bespoke products.
Saviour Chibiya will take direct accountability for the RBB ARO unit, while Thabo Mashaba, who was recently appointed Absa’s interim group chief people officer, will also take a seat on the exco team.
“We’ve made some real step changes in terms of diversity and inclusion. We’re now close to 50% representation on our executive committee,” said Rautenbach. “There are clear commercial benefits that will flow from the operating model changes and a more diverse leadership team, with further opportunities to strengthen our transformation profile.”
Absa said it was also making progress regarding permanent appointments in a number of interim roles, including group chief people officer; group chief IT officer; and group chief brand and marketing officer.
Rautenbach said the changes to Absa’s exco team would enable it to harness greater talent from an internal pipeline of candidates, which would also help it boost its transformation credentials. That comes after the Public Investment Corporation (PIC) lambasted the appointment of Rautenbach as CEO, describing the appointment of a white male as “yet another missed opportunity” to achieve greater racial representation.
“We are expanding the exco portfolio — that allows us to build on the senior leadership cohort in our organisation,” Rautenbach said. “By doing that it allows us to look at the next generation of leaders — in essence our future leaders in the organisation and set them up to grow ... and through that process to commit to building our own timber.”
The PIC didn’t immediately respond to a request for comment on whether Absa’s changes are sufficient to allay its transformation concerns.
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