Trimmings aimed at more agile Barclays
● Barclays Africa gave the market another glimpse of the direction in which it is heading, with the announcement on Friday of a new structure and new section heads in its South African retail and business banking division. This comes after the departure of several high-profile executives.
Arrie Rautenbach and Bongiwe Gangeni, CEO and deputy CEO of retail and business banking respectively, who were appointed in April, have driven the restructuring of the unit, which started at the beginning of the year. The aim is to dismantle the centralised structure of Barclays Africa, which will revert back to Absa Group on July 11.
“This structure is in line with our firm intention to give our businesses control and accountability for the implementation of our strategy. It brings them closer to the customer, enabling each to develop solutions that speedily respond to their needs,” said Rautenbach.
Each segment in the division will have its own risk, operations, human resources, finance, technology and compliance units, which Absa spokesman Songezo Zibi said would allow the units to be more agile and enable growth. Under the previous structure, the division relied on centralised functions.
Through the restructuring of its retail and business banking unit, Absa cut the number of senior positions to 12 from 27 by trimming between two and four layers of management in the unit, reducing its complexity, the group said.
The positions that have been filled in the retail and business banking division include Tshiwela Mhlantla as head of physical channels, Aupa Monyatsi as head of virtual channels, Cowyk Fox as head of unsecured lending and Faisal Mkhize as head of vehicle and asset finance. Geoff Lee has been appointed head of home loans. Four executive positions at the retail and business banking division still need to be filled.
The changes are aimed at Absa CEO Maria Ramos’s target to restore the group’s leader- ship in the South Africa retail banking market and to double its share of revenue in Africa from 6% to 12%. Some see this as the last chance for Ramos, 59, to leave a legacy at Absa. For much of her tenure, the group has been overseen by London-based Barclays plc, which has since reduced its stake.
None of the major banks’ shares have performed well this year, but Absa, with a 12% decline, has fared worse than its peers.
Early this year, Ramos reoriented the business around four divisions: retail and business banking, corporate and investment banking, rest of Africa, and wealth management and insurance. The restructuring of the remaining divisions is expected to occupy the group’s attention for the rest of the year.
The restructuring announcement comes a week after it emerged that Absa CEO of consumer banking Jan Moganwa was leaving the group. He will join MSG Group as COO. His departure was preceded by that of Craig Bond, CEO of partnerships, joint ventures and strategic alliances, who will take early retirement. Deputy CEO David Hodnett resigned in May.
Brian Mugabe, an equity research analyst at Momentum Securities, said the restructuring had been communicated to the market by Absa and the confirmation of it “removes any uncertainty around the changes [at the company] and allow a focus to return to the day-to-day business”.
A leaner structure should lead to greater efficiencies, and anything that brought decision-makers closer to the client should be a positive, as long as the group did not become too lean, a situation that would have its own challenges, he said.
Restructuring allows a focus to return to the day-to-day business Brian Mugabe
Equity research analyst at Momentum Securities