The deal is now sealed, apparently, for former Reserve Bank deputy governor Daniel Mminele to take the helm at Absa from next year. Three separate insiders have confirmed to the FM that Mminele has been approved by Absa’s board, as well as the banking supervision department of the SA Reserve Bank, as the new CEO.
It’s a big deal for a number of reasons, not least because Mminele will be the first black CEO of the bank, formed in 1991 by the fusion of a number of disparate smaller banks into one, with a strong Afrikaner culture. These included Allied Building Society, Volkskas and United Building Society. A year later, it added Bankorp.
Though most people know him from the Reserve Bank, Mminele has an extensive banking history. Between 1984 and 1987 he served a banking apprenticeship at German savings bank Sparkasse Paderborn. He followed this with a stint studying in London, in a course run by the Chartered Institute of Bankers.
After that he worked at Commerzbank’s Joburg branch, then for two years at African Merchant Bank until 1999.
At that stage he joined the Reserve Bank, where he headed several departments, including international banking and financial markets.
"He was meticulous, with sharp attention to detail," says someone who worked with him at the Reserve Bank. "In some ways, he was a conservative central banker, but also a good people manager."
Contacted by the FM this week, Mminele said: "The conditions attached to my cooling-off period do not allow me to discuss or comment on any issues."
Michael Jordaan, the former FNB head who is now chair of Bank Zero, describes Mminele as a "very impressive, rounded individual" with extensive commercial banking experience.
"I met him once at Davos and remember that he spoke perfect German, was very knowledgeable about global trends but was still very humble and approachable. If confirmed, his appointment is a coup for Absa as he will instil the right culture in a group that needs TLC after the Barclays divorce."
But if there’s little doubt about Mminele’s credentials, Jordaan is right that Absa is a beast in swift need of an makeover.
His appointment is a coup for Absa as he will instil the right culture in a group that needs TLC after the Barclays divorce
In some ways, it almost feels like it’s still an amalgamation of departments pulling in different directions. Maria Ramos, who left in January, tried to remedy this, but she was pulled in many different directions by Barclays.
Barclays bought 56% of Absa in 2006 for R33bn. But when the 2008 banking crisis hit, the British bank lost its appetite for risk. This led to Absa, once the titan of retail banking, swiftly surrendering its crown.
Case in point: a decade ago, Absa dominated home loans with 32% of the market (R219bn in lending), ahead of Standard Bank (29% of the market, with R201bn in lending), FirstRand (18%) and Nedbank (17%).
Today, Absa’s market share has slipped to 23%. Standard Bank has roared to the front with 34% (R324bn in lending), while FirstRand (now 21% of the market) has capitalised on Absa’s lethargy.
And the bank’s fortunes are evident in its share price: Absa has been the worst performer of all the banks over the past decade, gaining 20.6%, against Standard Bank (79%), Nedbank (100%), FirstRand (362%) and Capitec (2,048%).
Thankfully, Barclays sold its stake in Absa in 2018.
In March, finance director Jason Quinn stressed that "regaining leadership in our largest franchise, retail and business banking in SA, is a group priority". It is now at least keeping pace with rivals in growing revenue, even if its profitability is the lowest of the big four banks. But the concern is that in the rush to regain market share, Absa doesn’t short-circuit the compliance measures you need in a bank.
One of Mminele’s first tasks will be to create a unified bank with a defined focus. A former banking executive says Mminele’s task will be nothing short of redefining Absa.
"They’re coming last right now, and don’t seem to even know who they are or who they want to be," he says. "Do they have the best branches? The best products? Compare that to Capitec or FirstRand, who know exactly what they’re about."
Patrice Rassou, head of equities at Sanlam, says Absa’s new CEO will have to restore the bank’s identity. "They need to revive the retail business. For years, this was the heartbeat of the bank, but they lost it. They didn’t focus on either the top-end or the bottom-end customers, they didn’t have competitive transactional products and they were slow," he says.
At one time Absa’s staple was dominating the heartland of Afrikaner business, but it lost this too, he says. "[Mminele] isn’t really a retail banker, but they’ve got Arrie Rautenbach there, who is doing a good job. But you need the vision to come clearly from the top," he says.
It’s been a long wait. But Mminele seems one of the few people you’d think stands a chance of breathing new energy into Absa Towers.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.