Maria Ramos, nearly a decade on . . . what’s the prognosis?
CEO enters 10th year at Barclays Africa helm with a mixed record
● Nine years ago, when Barclays Africa CEO Maria Ramos’s predecessor Steve Booysen gave his swan-song results presentation, Lady Gaga’s Poker Face blared from the speakers as he took to the podium — apparently an ode to the banking environment of the day.
If Ramos had continued using a soundtrack, a feature of Booysen’s annual results presentations over the four years he spent as the bank’s CEO, her musical selection would no doubt have been less upbeat.
When she presents the annual results on Thursday, it will mark the beginning of her 10th year as CEO and, hopefully, the end of nearly a decade of exacting circumstances.
Since March 2009, when Ramos took the helm, Barclays Africa’s share price has been the poorest performer among the big four banks, growing 141%. In that period Standard Bank’s share price grew 241%, Nedbank’s 290%, and FirstRand’s shot up by 657%.
The group also relinquished market share to its competitors after being the country’s biggest retail bank in January 2008, with 30% market share in retail lending and 23% in retail deposits. It has since fallen to third place, behind Standard Bank and FirstRand, with a 21% market share in both categories.
In this context, said Anthony Sedgwick of Abax Investments, some shareholders had grappled with Ramos’s remuneration. In 2016 she was paid R29-million, the lowest among the CEOs at South Africa’s big banks, including Capitec’s Gerrie Fourie, but still not slim pickings.
In 2011, when she accepted a nonexecutive directorship at luxury goods group Richemont, shareholders also questioned whether she would be able to juggle all her commitments. At the time this, in addition to her limited banking experience, cast doubt on her leadership. Before assuming her duties at Barclays Africa, Ramos, who holds a banker’s diploma from the Institute of Bankers in South Africa, had been CEO of Transnet and director-general at the National Treasury.
“Maria is no doubt smart and has a reasonable understanding of the industry [but] it’s better to have a really experienced and driven person who has spent at least 20 years becoming an expert in every aspect of what a bank does before being appointed,” Sedgwick said.
Back then, some market sentiment suggested that Louis von Zeuner, who served as deputy CEO under Ramos before resigning in 2012, ending a 32-year career at Absa, was really the decision-maker at the bank.
Von Zeuner disagreed, saying that Ramos was not a banker but did not need to be one. The idea was for her to surround herself with excellent bankers so she could use her influence and global view to benefit what had been known as a largely Afrikaner bank.
“She was the first female CEO of a major bank and there were a lot of questions asked. If you think of the analyst community assessing the performance of banks, they were predominantly male individuals at the time” who might have judged Ramos unfairly, Von Zeuner said.
Perhaps it is unfair to place all of the bank’s problems at Ramos’s door. When she joined the then Absa Group, the world was reeling from the global financial crisis, following which greater regulatory pressure was put on banks.
South Africa was suffering a hangover from a lending boom in the mid-2000s, and Ramos had also inherited a messy relationship with the banking group’s former majority shareholder, Barclays plc. All of which did not ease her workload.
When the bank had to be steered through a period of slow growth in the home loan market, to which Absa was overexposed, and increase its presence in the fast-growing unsecured lending market, Ramos was also managing the acquisition of Barclays plc’s African operations and later the sell-down of its Barclays Africa shares.
Barclays plc announced in March 2016 that it would reduce its stake in Barclays Africa from 62.3% to a minority shareholding. In December last year it concluded the sale, which leaves it with 14.9% of Barclays Africa. Ramos may provide more information this week on the rebranding of the group’s Africa operations.
In 2012, the group tried to improve its unsecured lending offering by buying the Edcon store-card book, said Jan Meintjes, a portfolio manager at Denker Capital Management, but this did not yield the expected returns.
Ultimately, navigating the group’s relationship with Barclays plc saw Ramos and her management fall behind in innovation and the investment required to keep up with its peers. Instead, Barclays Africa adopted Barclays plc’s strategies and culture, which will now have to be unravelled.
Complacency in innovation also made it difficult for Barclays Africa to attract top talent, said Harry Botha, a banking and speciality finance analyst at Avior Capital Markets. The number of highly rated staff whose departure from the bank had a negative impact grew from 7.2% in 2009 to 8.5% in 2011.
In the early years of Ramos’s tenure, several executives left the bank, with corridor talk suggesting some were unhappy at missing out on promotions.
In 2016, the group reported its lowest employee turnover in four years. It also retained 93.5% of its top performers compared with 91.4% in 2015, owing to its “improving employer brand and pan-African opportunities”, the bank said.
Despite this progress the group last year made headlines when about 20 black professionals at Absa Capital staged a walkout, claiming that Phakamani Hadebe had been passed over for the position of group head of corporate and investment banking, and that this was not the first time a competent black employee had lost out. Barclays Africa said Hadebe had resigned two months prior to the walkout, citing personal reasons. He was appointed interim CEO at Eskom last month.
Under Ramos, employment equity at the bank has improved, though not as desired. The number of blacks in senior management had grown to 40% in 2016 from 32% in 2013, against the bank’s target of 60%. The number of black women in senior management increased from 12% in 2013 to 16% in 2016.
Since 2009 black ownership in Barclays Africa grew from 14.5% to 17% in 2017, the lowest among the big four. Barclays plc’s reduced shareholding has now created opportunity for more diversity.
But in the past nine years, said Botha, Barclays Africa had been able to nurture a sound corporate and investment banking business in its rest-of-Africa operations relatively quickly. Ramos and her team had also created value for shareholders when they negotiated a £765-million (about R12.4-billion) separation payment from Barclays plc.
Freedom from Barclays plc meant Ramos was able to resurrect the bank’s home loans business, which was impossible before, said Von Zeuner.
“She did not always get the reward for the complexities she had to deal with, and then, in the midst of that complexity, somehow she was able to deliver.”
There is speculation that Ramos, who turned 59 this week, may hand over the baton in the next year or two, although Barclays Africa has made no announcement regarding a succession plan.
It’s better to have a really experienced and driven person
Anthony Sedgwick Abax Investments