When we published our Hospital Pass cover story in 2009 (see picture opposite), two months ahead of Maria Ramos moving down the road from Transnet at the Carlton Centre to Absa Towers – she needed rugby-mad (now) husband Trevor Manuel and his sons to act out exactly what the phrase meant. Despite what was an apparently exuberant and accurate display played out in the family lounge – she took the job anyway.
We cautioned that a combination of increasingly adverse global economic forces coupled with a “complex array of internal challenges” meant that Ramos, who had no executive-level banking sector experience would find it tough going. It turns out we were right.
Measured against its rivals to the end of December 2012, Absa is underperforming on practically every matrix that matters. It has lost more than a million customers – a fact Ramos acknowledges. Its impairment charge at R8bn is second only to Standard Bank’s, it was also the only bank to register an earnings decline in 2012 courtesy of significant write offs in its legal mortgage book. Its rivals grew noninterest revenue (NIR) in the teens but Absa managed to deliver only mid single-digit expansion while noninterest income (NII) shrank as that of its rivals grew. It’s never a good idea to haemorrhage customers as transaction volumes are a key factor in driving NIR.
“We are taking the pain a lot later than the others who’ve taken it already,” says Ramos who tries to make light of customer losses, “if you added up the number of accounts we all claim to have together you would have a number considerably higher than the number of bankable people in South Africa.”
The reality is that it hurts to be behind the curve and there is a temptation to play catch-up – something the CEO is cognisant of and keen to avoid because of the new risks that would bring on to the Absa book.
Four years into the job and Ramos doesn’t