The appointment of Kenny Fihla as Absa CEO couldn’t be better news for the bank and its shareholders. Absa was under pressure to appoint a black CEO. It might have been tempted to appoint a nonbanker as a constitutional monarch to pacify shareholders. But, instead, it has persuaded the Standard Bank heir apparent to jump ship.
And it was a well-kept secret. Fihla was still commenting on the day of the Standard Bank annual results (March 13) on behalf of the group. By all accounts, he was still the golden boy on his way to the top.
Since former National Treasury director-general Maria Ramos stepped down as Absa CEO in 2019, there has been complete chaos in that C-suite. The board thought it had found the ideal choice in former Reserve Bank deputy governor Daniel Mminele. But the skill set for a good central banker (and there’s no doubt Mminele was outstanding at the Reserve Bank) is quite different to that of a commercial banker.
Under Ramos, who was not a commercial banker by training either, Absa had a federal structure with powerful feudal barons, notably Arrie Rautenbach who ran the retail and business bank. As this accounted for 60% of Absa’s profits, he was more powerful than the CEO herself, in many respects.
When Rautenbach finally got the CEO position there was considerable opposition from the Public Investment Corp (PIC). Quite why the PIC did not show the same hostility to Ramos, who is also white, remains a mystery.
Nonetheless, the pressure to appoint a black CEO was overwhelming. The temptation might have been to follow Investec’s example and ask the black chair to become CEO. In any case, chair Fani Titi took over from Stephen Koseff as CEO when the old warhorse finally retired after decades in the role.
All credit to Moloko for persuading Fihla to come over. He was the heir apparent at Standard Bank
But chair Sello Moloko, whose experience is in asset management and private equity, must have recognised that Absa needed an experienced banker to steer the ship.
Titi is also a career private equity man, but then Investec, as a specialist bank, is a different animal to mass market Absa.
All credit to Moloko for persuading Fihla to come over. He was the heir apparent at Standard Bank. But he is only a couple of years younger than incumbent Sim Tshabalala … so Fihla would probably have had a short tenure.
Tshabalala is an outstanding leader, well liked by staff and shareholders alike, and he is, by all accounts, in good health with plenty of gas left in the tank.
Tshabalala described Fihla’s departure, graciously, as a heavy blow. But Standard Bank has a strong bench. If anything, it tends towards the top-heavy and bureaucratic. According to industry insiders, candidates include Luvuyo Masindo, the head of the corporate and investment bank; Funeka Montjane, who runs the retail bank; and possibly Margaret Nienaber, the COO.
But the Standard Bank board should have at least three years to make up its mind; it does not even have to replace Fihla as deputy CEO. It has only had a deputy CEO a few times in its history.
The market reacted swiftly to the announcement, with the Absa share price having a strong day, and Standard Bank battling for a while. But it’s not a symmetrical trade off. Absa has gained far more from Fihla’s arrival than Standard Bank has lost from his departure.
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