Sim goes it alone

Stan­dard Bank boss af­firms the group’s strat­egy that, al­though it was crit­i­cised, ap­point­ing two CEOs in 2013 made sense

CityPress - - Business - LESETJA MALOPE lesetja.malope@city­press.co.za

Sub­tle and hum­ble are two of the words used to de­scribe Stan­dard Bank CEO Sim Tsha­bal­ala, who, un­til last week, held the post jointly with Ben Kruger. The two were ap­pointed in 2013 as part of what the bank said was a nec­es­sary struc­ture to ef­fect its turn­around strat­egy. It was heav­ily crit­i­cised for the dual ap­point­ment.

Speak­ing to City Press this week from the bank’s head of­fice in Rose­bank, Jo­han­nes­burg, Tsha­bal­ala said dis­cus­sions about this joint lead­er­ship had con­tin­ued since it came into be­ing, and added that the ar­range­ment was ne­ces­si­tated by the con­di­tions at the time.

One of the most com­mon sus­tained crit­i­cisms against Stan­dard Bank was the as­ser­tion that the joint-CEO struc­ture was an in­sult to black ex­cel­lence and, in ef­fect, meant that Tsha­bal­ala, whom many thought was a nat­u­ral choice to suc­ceed Jacko Ma­ree at the time, was in­ca­pable of lead­ing the group alone and needed to be yoked with a white man to do his job.

As it turns out, it was Kruger who pro­posed that Tsha­bal­ala con­tinue as sole cap­tain, and that he step down. Kruger will stay on as an ex­ec­u­tive di­rec­tor and re­port to Tsha­bal­ala.

Asked whether he thought he was ready to lead the bank alone, Tsha­bal­ala again made the point that, in light of what was hap­pen­ing in the bank­ing group at the time, if a sin­gle per­son had headed up the restruc­tur­ing process, they would have suf­fered a break­down be­cause of the im­mense work­load.

The bank was ex­it­ing its in­ter­na­tional op­er­a­tions at the time, sell­ing off units in Turkey, Ar­gentina and Sin­ga­pore, down­scal­ing op­er­a­tions in Hong Kong, and de­ploy­ing cap­i­tal to lo­cal and African op­er­a­tions.

Tsha­bal­ala said the bank was also set­ting up a R21 bil­lion in­for­ma­tion tech­nol­ogy sys­tem at the time. It is sched­uled for com­ple­tion later this year.

“You had ma­jor projects that re­quired the at­ten­tion of a CEO, and you could have done it as a CEO. But I am pre­pared to bet you that who­ever that per­son was would have had a ner­vous break­down to­day. And thank God we didn’t make that de­ci­sion then be­cause the load was just enor­mous,” he in­sisted.

“If you are truly an African in­sti­tu­tion, you need more peo­ple from out­side South Africa at se­nior ex­ec­u­tive level,” Tsha­bal­ala added.

He pointed out that, given that the bank op­er­ated in 19 African coun­tries, and those coun­tries con­trib­uted sig­nif­i­cantly to the prof­its of the group, it made sense that the bank re­flected the de­mo­graph­ics of the con­ti­nent.

At least 30% of the bank’s prof­its come from its African op­er­a­tions.

Hence, rea­soned Tsha­bal­ala, this was where he hoped to source ex­ec­u­tives in his bid to have more faces from out­side the coun­try take up roles in the higher ech­e­lons.

How­ever, the con­stant mon­key on the bank’s back re­mains trans­for­ma­tion, and Tsha­bal­ala read­ily ad­mits this: “No­body in their right mind would claim that any of the coun­try’s lead­ing fi­nan­cial in­sti­tu­tions and busi­nesses are trans­formed. We are all do­ing our best.”

Cur­rently, the bank is spoilt for choice re­gard­ing some of the coun­try’s top black ex­ec­u­tives.

Tsha­bal­ala ad­mits that, be­cause of its fi­nan­cial mus­cle, the bank does not strug­gle to re­cruit tal­ent based on pay pack­ages. How­ever, it is the re­ten­tion of tal­ent that is prob­lem­atic.

“To be hon­est, a lot of peo­ple leave sim­ply be­cause they are frus­trated, or be­cause they don’t like their bosses or don’t get along with them. A lot of the time, peo­ple feel that the cul­ture is not con­ducive for them to stay. It de­pends on all of those vari­ables.

“We try to con­stantly mon­i­tor the rea­sons peo­ple leave and try to ad­dress them,” he said.

Tsha­bal­ala, a firm be­liever in team­work, could not stop brag­ging about the long list of ex­cel­lent black ex­ec­u­tives the group boasts, rat­tling off names such as Kenny Fihla, Thu­lani Sibeko, Funeka Mon­t­jane, Zweli Many­athi, Lin­coln Mali, Sim­phiwe Nghona and Alpheus Man­gale.

He said that, if some of these ex­ec­u­tives were to run their re­spec­tive units in­de­pen­dently and listed them on the JSE, these busi­nesses would be in the top 40 on the JSE.

Look­ing to the fu­ture, Tsha­bal­ala said he hoped to con­tinue steer­ing the com­pany to­wards im­prov­ing var­i­ous as­pects.

“The main mea­sure at the mo­ment is re­turn on eq­uity. Our tar­get range is be­tween 15% and 18%. At half year, we were at about 16%,” he said.

He said that, al­though Stan­dard Bank would con­tinue on its growth path within the coun­try, it also wanted to po­si­tion it­self to ben­e­fit from the growth of African coun­tries in which it op­er­ated, es­pe­cially from those whose GDP was grow­ing faster than that of South Africa.

Tsha­bal­ala said that, on the lo­cal front, the bank had con­sol­i­dated it­self as a strong leader in home loans, ve­hi­cle and as­set fi­nance, cash man­age­ment, and un­se­cured and cor­po­rate lend­ing, and was work­ing hard to make even more im­prove­ments in these cat­e­gories.

PHOTO: MUNTU VI­LAKAZI

SOLE ROLE Stan­dard Bank CEO Sim Tsha­bal­ala

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