African Bank, which emerged out of one of SA’s biggest bank collapses, was thrown into a leadership crisis on Monday when CEO Basani Maluleke resigned abruptly on the eve of its release of year-end results.
Maluleke’s resignation, effective at the end of April, to pursue other career opportunities, leaves African Bank in the middle of a strategic growth push that includes acquisitions, bulking up its digital offering and diversifying its product offering to reduce its reliance on risky but lucrative unsecured loans.
The announcement of her departure, which also leaves the company rudderless at a time when the industry is grappling with the worst economic crisis since the 1930s, came a day before the company was due to report its annual results.
It stunned the board led by Thabo Dloti, former CEO of insurer Liberty Holdings.
"It was a complete surprise to us, hence we are now beginning a search for a new CEO," Dloti said. "We simply do not know what Basani’s future plans are, but she has agreed to remain with us for the next three months to undertake an orderly handover."
Gustav Raubenheimer, the bank’s CFO, will serve as acting CEO while the group searches for a replacement for Maluleke.
Maluleke, who was the first black female CEO to lead a major SA bank when she took over the position in March 2018, declined to comment.
Dloti signalled that the company will not tinker with the growth blueprint spearheaded by Maluleke, saying "we remain committed to executing on the strategy we have developed".
African Bank’s shareholders, which include the Reserve Bank and the Public Investment Corporation (PIC), focused much of its revival on developing a transactional banking and retail deposit franchise. It had virtually no transactional banking capability before its collapse in 2014.
Maluleke and her predecessor, Brian Riley, were instrumental in developing this capability.
The new strategic growth plan includes expanding the business, which is sitting on R5.4bn in cash, through acquisitions to remain a long-term competitor in the increasingly crowded banking market dominated by five lenders: Capitec, Standard Bank, Nedbank, FirstRand and Absa.
African Bank, which was rescued in a R10bn bailout package devised by the Reserve Bank after choking under a mountain of bad debts in 2014, recently announced plans to axe as many as 317 workers, or one in 10, in response to a wave of defaults sweeping across the industry.
The banking sector set aside billions of rand to cover losses from an expected spike in consumer defaults in an economy wallowing in recession and bleeding jobs after coronavirus-induced restrictions wreaked havoc on household and business finances.
The retrenchments underscored one of Maluleke’s main priorities in which she has been automating processes across the bank’s operations, including making its services available online. This renders jobs in bank branches redundant as consumers turn to their smartphones for services.
African Bank recently secured approval from shareholders including the Reserve Bank and the PIC, to tap capital markets to raise R8bn over the next few years if required.
"The board is appreciative of Basani’s significant contribution in leading the transformation at African Bank to become a diversified and investable retail bank and wishes her well with her future endeavours," African Bank said in a statement.
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