No fixed CEO for Absa until 2020

Absa is going to be without a permanent CEO to steer the ship until 2020, leaving SA’s third-largest bank by market value vulnerable in an increasingly competitive environment.

Absa has mapped out an ambitious growth strategy that includes winning back market share at home and building a stronger business elsewhere in Africa, but it is facing fierce competition from old rivals and newly launched digital banks vying for young, tech-savvy banking consumers.

René van Wyk has been running the show in a temporary capacity since March.

Absa was on track to announce a permanent replacement for former CEO Maria Ramos just before its half-year earnings report in August, but chair

Wendy Lucas-Bull said at a shareholder meeting that the new CEO would start work only in early 2020.

“Everybody that you are looking at in this market has significant lock-ins in terms of commitments, and then they’ve got cool-off periods that are imposed by the Reserve Bank,” Lucas-Bull said.

Absa is the only top-four SA bank yet to join a banking-fees price war that has seen the likes of Nedbank, FirstRand and Standard Bank slash fees or launch zerofees products to defend the position from more nimble, capital-light digital competitors.

The fact that Absa did not have a new CEO in the pipeline and had to appoint an interim CEO, while going through a major organisational and brand change, exposed the cracks in the organisation’s succession planning.

But Lucas-Bull said this was because Absa had issues such as its separation from Barclays and rebranding to Absa, and it did not want to divert attention from getting these things done.

The chair said that keeping Ramos in place to negotiate the divorce settlement with Barclays became more critical than looking for the next Absa leader because the board knew it was going to be a difficult split.