NO STOPPING NXASANA
Sizwe Nxasana, who will be leaving as FirstRand CEO at the end of September after growing the group into the biggest bank in South Africa by market capitalisation, is not about to “go sit on a rocking chair and retire”.
Nxasana, 57, who was originally set to leave in 2017, is one of the country’s most esteemed executives. His track record i ncludes establishing Sizwe & Co. in 1 989, r unning Telkom between 1998 and 2005 (and overseeing its 2003 listing in Johannesburg and New York) and founding the leading audit firm SizweNtsalubaGobodo.
He will be focusing on his family business and charitable trust, and hopes to work for “a few more decades”, he told Finweek in an interview. “There are a number of opportunities, mainly in the family business space.” Nxasana is married to his high school sweetheart Judy Dlamini, a medical doctor-turned-businesswoman, whose positions include chairperson of Aspen Pharmacare. Their family interests include the Mbekani Group, with interests in health, logistics and property, and the Mkhiwa Trust, which supports education and health projects in rural communities, mainly in KwaZulu-Natal.
Nxasana joined FirstRand as CEO of FirstRand Bank, and took over as Group CEO when Paul Harris stepped down in 2010. Under Nxasana’s watch, the group expanded into six countries, exited operations in Latin America and Australia and reported a 23% annual
compound growth rate in earnings from R8.3bn to R18.7bn for the year ended June.
Diversifying the group’s geographical footprint hasn’t been easy. Attempts to buy Nigeria’s Sterling Bank failed in 2011, and FirstRand also failed to reach an agreement to buy Merchant Bank Ghana in 2013. In 2011, the late Zambian president Michael Sata cancelled FirstRand’s purchase of Finance Bank in 2011, leading to probes and uncertainty over the deal.
Despite the challenges, Nxasana has “absolutely no regrets” about the group’s diversification strategy, which has relied heavily on organic growth.
“We’ve always maintained that we’re not prepared to do deals at all costs. To us in FirstRand, protecting shareholder value […] is more important. So the fact that we have grown organically in these different countries − yes, it takes time, but we understand that, and we are very skilled at starting businesses,” he said.
“Those businesses are on track, they’re doing well − in fact some of them are even slightly ahead of where we thought they would be at this stage of their development, such as Zambia and India as well as Nigeria.”
FirstRand plans to start up banking operations in Ghana by mid-year, and will be focusing on scaling up and expanding its other operations outside SA.
The group also continues to look for acquisition opportunities in Nigeria, where the falling oil price has led to a major devaluation of its currency and company valuations. “We are more focused on growing our business − despite the lower valuations, there are still big gaps between bid and offer spreads,” said deputy CEO Johan Burger, who will succeed Nxasana. Rand Merchant Bank CEO Alan Pullinger will take over from Burger.
Nxasana said that his earlier-than-expected departure makes sense as part of FirstRand’s succession process, which started with the departure of Michael Jordaan (former CEO of First National Bank) and Brian Riley (former CEO of Wesbank) at the end of 2013. “It made it more appropriate for me to step down now given where we are with the rollout of our strategies. There have been a number of changes in the group that I’ve been part of, and I just thought it was time for me to go and do other things, but also to create space for my successor to take the organisation forward.”
Nxasana is still considering an invitation to return to FirstRand in 2017 as deputy chairman. His ties to FirstRand founders Paul Harris and GT Ferreira stretch back to the 1990s when they all served as non-executive directors of the Natal Building Society.