FirstRand welcomes go-getting helmsman
New CEO ready to steer SA’s biggest bank to new growth
JOHAN Burger, FirstRand’s new CEO, “has big shoes to fill”, according to Paul Harris, one of the bank’s co-founders.
Burger, 56, can start calling himself the head honcho of South Africa’s biggest bank by market value, following Sizwe Nxasana’s decision to step down after almost five years at the helm.
Laurie Dippenaar, FirstRand cofounder and chairman of the group, said he was “sure Burger and his team will continue [building on Nxasana’s] legacy”.
Dippenaar said he believed Nxasana was the most “revered” person at FirstRand.
During Nxasana’s tenure, the company’s total return had been 19% compound annual growth, while that of rivals had lagged at 14.7%, he said.
“That is an outperformance of 4%. Somewhat better, I would contend, than a photo finish,” Dippenaar said at the release of the group’s annual results this week.
Under Nxasana, a former CEO of Telkom, FirstRand’s market capitalisation had grown from R100-billion to R300-billion, excluding the unbundling of Momentum and Discovery Holdings from the group, he said.
“I think that is an outstanding performance by any measure, especially if you consider we had the greatest financial crisis during that period.”
Both co-founders said that Nxasana was “not lost” for good — he was taking a two-year sabbatical and would return as deputy chairman.
During Nxasana’s tenure the group’s share price surged 192%, outperforming the JSE All Share index, which grew 75.6% over the same period, and the JSE banking index, which jumped 85.6%. During the same period, Nedbank shares added 58%, Barclays Africa’s stock advanced 30.8% and Standard Bank had 30.7% growth.
On Thursday, FirstRand reported a 13.2% rise in headline diluted earnings per share to R3.81 compared with R3.36 a year before.
Net income from operations increased to R29.2-billion from R25.3-billion.
It is clear that Nxasana will be a tough act to follow.
However, Burger has been his right-hand man throughout the period. In fact, their offices at No 4 Merchant Place in Sandton, Johannesburg, were constructed in such a way that they could always see each other.
Burger laughed off the fact that he had big shoes to fill, saying he had been around the banking sector for more than 25 years, and “it is not something new to me . . . it is finally having the responsibility of being a leader of a group I spent a lot of time with”.
Asked if the post was a long time coming, Burger said: “Not at all,” adding that “it is nice to be given the opportunity and lead an organisation of this stature”.
Burger started his career with FirstRand in 1987. He was appointed chief financial officer of Rand Merchant Bank in 1995, and was involved in the formation of FirstRand in 1998.
“I’ve been very fortunate and had great career highlights . . . and this is the final step of my career,” he said.
If he was not a banker he would have liked to fill stadiums as a musician, he said.
“I used to be part of a band. I used to play lead guitar and piano. If I wasn’t doing banking, that would have been my second choice.”
Burger said he was fortunate to inherit a great team from Nxasana, which would help him “tweak” the group’s growth strategy in Africa, “where we have an increased focus”.
Wayne McCurrie, Momentum portfolio manager, said: “FirstRand is very successful and has done very well ... relatively better than the other banks for the past seven years. So there is no need for an external person.”
Co-founder Harris summed up the investment community’s view on Burger’s appointment: “Why fix something that is not broken? The team works.”