Maria Ramos has been trying to leave Absa for years. She first wanted to resign in 2016, but Barclays asked her to stay to sort out the "separation" as the British bank wanted to reduce its stake in Absa to below 54%. She did that, even wringing R12bn out of Barclays as a divorce "settlement" along the way.
This week Ramos drew the line, saying she will retire in February as she turns 60. "It had never been my intention to stay this long‚ as I have always believed that a CEO’s tenure should allow for a regular refresh."
Absa’s board, chaired by Wendy Lucas-Bull, began looking for a replacement in May 2018, and compiled a shortlist months ago. It seems the board has largely decided who it wants, but that person still needs to be green-lighted by the SA Reserve Bank. Lucas-Bull says: "We feel confident that we’ll be able to make an announcement by the time we go to market with our half-year results." But that’s only in August — a long time for the bank to kick its heels in purgatory.
Insiders say the new CEO is set to be a black South African, from outside Absa. This implies that neither deputy CEO Peter Matlare nor the bank’s interim CEO, René van Wyk, are in the running.
And you might not know it from the criticism often levelled at Ramos, but hers are big shoes to fill — even if any sober assessment of her tenure at Absa isn’t an entirely uncomplicated one.
Born in Lisbon, Ramos — whose father was a bricklayer — immigrated to SA via Mozambique with her family as a child. Soft-spoken, she is as hard as teak. She began working at Barclays as a clerk in 1978 and in 1983 became the first woman to win the Barclays Bank graduate scholarship. After that, she worked as an economist for the ANC before finding herself director-general at the National Treasury.
But has her tenure at Absa been an unequivocal success? "She would say it has been," says an insider. "When she joined, it was an SA bank owned by a British bank. Not only did she get it a R12bn settlement in the divorce from Barclays, but Absa is now a continental business with a strong balance sheet."
But there are other metrics too. Since she was appointed in November 2008, Absa’s share price has risen 86% from R94 a share to R175.61.
That sounds fantastic — until you consider its rivals. FirstRand, for example, has risen 490% in that period, Nedbank has gained 228% and even the laggardly Standard Bank, which is only now recovering from a listless few years, has risen 159%. (Capitec, which by comparison looks like Garry Kasparov toying with the weekend players from the Parkview Chess Club, has risen 3,940%.)
In fact, the real issue over the past decade has been Absa’s loss of its once unassailable position in retail banking. Back in November 2008, Absa was the leader with a 31% share of the home loan and mortgage market, according to figures from Banking Genesis.
Today, Absa is third with 21% of the mortgage market, behind Standard Bank (29%) and Nedbank (22%). When it comes to total deposits from clients, Absa is third with 20% of the market (behind Standard Bank and FirstRand with 22% each); but back in 2008, Absa had a 23% share, marginally behind Standard Bank.
Perhaps it would be fairer to look at the bank Ramos will leave behind. On that score, Absa is stronger
But this slide cannot be attributed entirely to Ramos. During almost all of her tenure, Barclays acted as the risk-averse parent who wasn’t about to let Absa go out and play with its peers. It was the Brits who thrust a sword through Absa’s retail footprint.
Chris Steward, the head of financials at Investec Asset Management, says given these factors, it would be difficult to describe her tenure "as an unambiguous success". Rather, it was a tough few years.
"It is true that Barclays’ desire to curtail balance sheet growth led to a loss of market share in SA. But was there poor management of Absa’s retail and business bank at the same time? Yes, I think it’s fair to say that was also a contributing factor," says Steward.
In mitigation, Steward says it would have also been hard for Absa to attract top talent given that, due to Barclays, it was competing with upstarts like Capitec with one hand tied behind its back.
Perhaps, then, it would be fairer to look at the bank Ramos will leave behind. On that score, Absa is undoubtedly stronger than it has been in recent years, having shed the overbearing eagle. It also has a strong African franchise, for one thing, and there are signs it is looking to pick up some business.
This seems evident from the share price. Remarkably, while Absa’s share has been the notable laggard among the banks for a decade, over the past six months it has risen 8% — the best performer among banks other than Capitec. This suggests the sands have shifted. With any luck, Ramos’s successor will be able to use the foundations she built — and they may have a far easier time than she did.
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