CEO: MARIA RAMOS COMPANY: ABSA
1-year return: 16.46%
The money quote: “I think I’m pretty tough. I have very high expectations of the people I work with. “- City Press
UPPED FROM AN E at the last minute by a face-saving deal that, if approved by minorities, will make Absa the continent’s biggest bank. Returns from Absa since Ramos’s appointment as Group CEO, have been clunky. To be fair, so have Standard Bank’s and both FirstRand and to a lesser extent Nedbank have been recovery tales.
But Absa has had a particularly unspectacular year marred by an unsettling profit warning related to write-offs in its legal mortgage book that the market did not see coming. The group’s 2012 full-year results showed HEPS just 4% ahead of where they had been in the heady days of 2007. ROE, at 16.4%, is way below the previous highs.
The environment in which Absa operates has not been supporti ve. Banks have become considerably more r isk averse in an environment that has been better levera ged i n the retail sector, which has seen key players consistently growing earnings in the region of 20% despite similar drivers affecting them and retail banking.
Perhaps more damaging than the first half profit warning has been the massive outflow of executive talent, either by accident or design. It does not make for great continuity for investors. The group this month saw the departure of the last of the old guard of Absa managers, Louis von Zeuner, who stays on in a non-executive role but is no longer involved on a daily basis.
For staff, 2012 has been unsettling courtesy of the hashed messaging from the group, which earlier this year seemed confounded by its own people strategy. While rumours circulated about Barclaysdriven mass layoffs – the group appeared unable to calm the waters.
None of this was helped by the arrival of the Red Ants at Absa HQ one afternoon to collect furniture as part of a court case the bank was involved in. The f u r n i t u r e wa s returned; however, it did a bruised image little