Mminele’s priority: a new Nedbank CEO?
While there’s no indication that CEO Mike Brown is set to leave, the question of his successor may be uppermost for Nedbank’s new chair
It was no small coup for Nedbank when it announced the appointment of Daniel Mminele as board chair from April 1.
Mminele a former deputy governor of the Reserve Bank and CEO of Absa who was most recently head of President Cyril Ramaphosa’s climate finance task team is a “highly regarded” banker, according to one fund manager who asked not to be named.
Now one of his first tasks is likely to be: find a new CEO for the bank.
“[Mminele] is a win for Nedbank, still a loss for Absa, in our view,” Patrick Mathidi, head of equity and balanced funds at Aluwani Capital Partners, tells the FM. “Daniel brings vast global regulatory and environmental insights and perspectives given his tenure at the Bank and the various global central bank committees he participated in.”
Mminele steps into the shoes of Mpho Makwana, who served as independent director of Nedbank for almost 10 years and took over as chair on the death of Vassi Naidoo in 2021.
Mminele left Absa after 16 months as CEO, citing differences with the lender’s board, chaired by Wendy Lucas-Bull during his short-lived tenure.
Hopefully, things should go more smoothly between Mminele and Nedbank CEO Mike Brown.
Brown has been in the post for almost 13 years, and while there’s no indication he plans to leave soon, a decision to stand down wouldn’t come as a terrible shock. Though he isn’t close to Nedbank’s retirement age of 60 yet, he has served on its board since 2004 first as CFO and from 2010 as CEO. In all, he has worked at the bank for more than 27 years.
Nedbank itself says “Mike Brown’s tenure is determined by the board”.
Over the past decade, the lender’s share price has gone up 22.9% hardly shooting the lights out, especially set against the 33.8% return delivered by the JSE’s financial index over the same period. Including handsome dividend payments, however, the stock has returned 7.36% a year, beating annualised CPI inflation of 5.17% over the same period.
More striking is the balance sheet. Under Brown’s leadership, Nedbank’s assets have more than doubled from R608bn at the end of 2010 to R1.25-trillion at the end of June last year. Return on equity improved from 11.8% to 13.2% over the same period.
“Mike has done very well,” says Royce Long, founder of Obsidian Capital. “I’m not sure who would take over from him.”
Mathidi also awaits any signs from Nedbank as to who would succeed Brown.
“We are looking at
this space with keen interest,” he says. “In our previous engagement with management and the board, we have been assured there is a succession plan in place.”
This will demand Mminele and the board’s attention in the short term. “There are no obvious internal candidates in our view,” Mathidi says. “We presume this is one of the items the incoming chair would try to get a quick handle on, especially after his personal experience at Absa. Hopefully, there are some learnings there that Nedbank can avoid.”
Tyron Green, lead analyst on Nedbank at Granate Asset Management, ventures two options for Brown’s successor: Anél Bosman, who is head of the corporate & investment banking (CIB) unit, or CFO Mike Davis.
“Mike [Davis] was originally head of balance sheet management,” Green says. “He knows the business very well.” Davis was appointed CFO in October 2020 when Raisibe Morathi left after an 11-year stint to join Vodacom.
Bosman’s division has “performed well under her leadership”, Green says. She has been at Nedbank for more than 21 years and was promoted to CIB group managing executive three years ago after the retirement of stalwart Brian Kennedy.
Another contender is Ciko Thomas, who heads Nedbank’s retail & business banking. Thomas has been leading this unit since April 2016. The unit’s headline earnings grew from R4.96bn in financial 2016 to R5.29bn in 2019, before the pandemic struck. In 2021, the unit achieved headline earnings of R4.53bn.
Two long-standing Nedbank executives will retire soon, too: Trevor Adams, group chief risk officer, and Fred Swanepoel, group chief information officer. Plenty of change afoot, then.